A monthly round-up of the MAPI resources available to NFPA members through NFPA's membership in MAPI.
Issues in the Brief
A Wish List For Santa
U.S. manufacturers have been especially good this year. They kept the U.S. economy from grinding to a halt, had output growth of 4.3 percent (compared to 1.8 percent for the economy as a whole), and achieved export growth of 7.5 percent. Their 2011 productivity levels, which in the first three quarters grew by an average of 3.1 percent—three times that of the rest of the business community—helped Americans do more with less. And while they're no longer the employment powerhouse they once were, manufacturers still added almost 200,000 jobs to the economy this year—more than 15 percent of all private sector jobs created. In this Issues in Brief, MAPI President and CEO Stephen Gold sends a wish list to Santa, asking for some North Pole help with delivering corporate tax reform, reining in regulation, coordinating an educational effort to power the next generation of workers and innovators, and improving global policymaker leadership.
The Eurozone and U.S. Export Competitiveness in Manufactures
Intense discussion of the eurozone financial crisis has centered on fiscal accounts and the banking sector. Little attention has been paid to the impact on trade beyond the obvious fact that if there is slower eurozone growth, import growth will also be down. The adverse trade impact of the eurozone on third countries, however, and on U.S. exports of manufactures in particular, is significant and growing, and faces uncertain prospects ahead.
Festering European Crisis Now Weighs on Financial Stability - Sovereign Debt Problems Threaten to Infect Banks
presented by Kris Bledowski, Ph.D., Economist, MAPI
The European sovereign debt crisis is far from over. In fact, it threatens to turn into a broader financial crisis. In this presentation MAPI Economist Kris Bledowski, Ph.D., delves into the linkages between governments and banks in Europe. He concludes that in the absence of a clear growth strategy and short-term measures to restore market confidence, the forecast recession in Europe might turn out to be deeper and longer than previously expected. The audiovisual presentation is approximately 10 minutes long.
MAPI U.S. Industrial Outlook: Manufacturing Experiencing a Rebound, Some Deceleration in Growth Expected in 2012
MAPI forecasts that manufacturing growth will outperform overall GDP growth in 2012. Pent-up demand for consumer durables (particularly motor vehicles) exists, firms are profitable and need to spend more for both traditional and high-tech business equipment, and reasonably strong growth in emerging economies is still driving U.S. exports. Manufacturing production is forecast to increase 3 percent in 2012 and 4 percent in 2013. A 4 percent average annual growth rate is forecast for 2014 to 2016.
Latin America Manufacturing Outlook: An Ongoing Brazilian-Induced Soft Patch Will Be Followed by Moderate Growth in 2012
MAPI's 2011 predictions for manufacturing production growth in Latin America were revised downward to 2.5 percent (from the previous 4.2 percent estimate) as a result of the ongoing global economic uncertainties. While part of the slowdown started to materialize in the third quarter, we suspect that most of the weakness will be seen in the fourth quarter of 2011 and the first months of 2012. The slowdown mainly comes from Brazil's factories, which saw their output flatten during the last six months. Mexico's resilience as well as government incentives stimulating demand in Brazil will help Latin America's manufacturers grow at a moderate 4.4 percent rate in 2012.
Canadian Economic Review and Outlook, 2011-2012
As the only G7 member that has fully recouped its GDP and employment losses sustained during the downturn, Canada has led the economic recovery among industrialized nations. However, with commodity prices topping out and dimming prospects for global growth, Canada will be hard-pressed to maintain its superior economic performance. Annualized GDP growth was a faster-than-expected 3.5 percent in the third quarter of 2011, but weakening labor markets and export demand will reduce quarterly annualized growth to the 2 percent range in 2012, well below last year's forecast.
Analysis on Durable Goods
Cliff Waldman, Economist, offers analysis on the November 2011 durable goods report.
"Propelled by a 73 percent surge in the demand for commercial aircraft and parts, total new orders for long-lasting durable goods registered strong 3.8 percent growth in November after three months of sluggish performance," Waldman said. "Unfortunately, the spike in civilian aircraft activity on the heels of significant contractions in September and October is typical of the volatility in this series; more stable data reflect a more sluggish picture for November. Total new orders, excluding transportation, advanced by a meager 0.3 percent after 1.2 percent average growth during the prior two months. More importantly for the broad economic outlook, business equipment investment, as gauged by new orders for nondefense capital goods, excluding aircraft, has now experienced two consecutive months of contraction averaging a significant 1.1 percent. The acceleration in capital spending seen during the third quarter is likely waning as the impetus from the revival of key global supply chains in the wake of the Japanese tsunami abates. "Slowing export growth and moderating business investment suggest that the U.S. manufacturing sector concludes a volatile year with an outlook that is wedged between embryonic signs of more robust economic activity in the domestic U.S. economy and the risks posed by a shaky global economic environment plagued by persistent uncertainties in both industrialized and developing nations," Waldman added. "Slowing but positive output growth remains the most likely path for U.S. manufacturing over the near term. But years of disappointingly sluggish domestic U.S. economic performance, a menacing Eurozone crisis that is far from resolved, and rapid structural change in a range of critical areas from global labor markets to global trade suggest that vigilance and careful attention to incoming data remains the smartest posture for manufacturing executives, as well as economists, into what will likely be a bumpy and uncertain 2012."
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