A monthly round-up of the MAPI resources available to NFPA members through NFPA's membership in MAPI.
Issues in the Brief
Can South Africa Generate Growth in Manufacturing?
The economic effects of a massive power outage that hit South Africa in early 2008 are still being felt through slower growth and higher electric rates. The government-owned utility has repeatedly sounded a vuvuzela-like warning about future load-shedding events. Meanwhile, South Africa’s reputation for low cost electricity and (in the African context) a fairly reliable power grid has probably been damaged, with possible long-lasting consequences for investment.
Policy reforms that should play a role in solving South Africa’s ongoing energy crisis are not being seriously considered. Opening the market to large-scale private investment in electricity generation—whether nuclear or coal-based—or a break-up of the state monopoly on power generation would reduce the potentially crippling dependence on one supplier.
Mexico’s Elections: A Predictable Outcome?
On July 1, 2012, Mexicans will elect a new president after two consecutive six-year terms under the ruling of the National Action Party (PAN), first with Vicente Fox and now Felipe Calderón. The latest polls show the candidate for the Institutional Revolutionary Party (PRI), Enrique Peña Nieto, leading by more than 10 points, followed by Andrés Manuel López Obrador (AMLO) from the Party of the Democratic Revolution (PRD) and Josefina Vázquez Mota from the PAN. Would a PRI administration change the direction of Mexico’s economy and manufacturing?
Manufacturing Activity June 2012: Slowing Growth
presented by Don Norman, Ph.D., Senior Economist at MAPI
Don Norman reports that manufacturing production declined in May and the current activity is consistent with MAPI’s forecast of decelerating manufacturing growth starting in the second quarter of this year. Dr. Norman discusses the latest statistics for the manufacturing labor market, orders, production by industry, factory utilization, prices, and trade in this audiovisual report. He concludes that—taken together—the indicators show activity in manufacturing slowing from a very strong pace just a few months ago. He reiterates the forecast for manufacturing production growth this year and next. The presentation is approximately 9 minutes long.
Indian Manufacturing Slows—Macroeconomic Fundamentals Deteriorate
presented by Cliff Waldman, Senior Economist at MAPI
Cliff Waldman provides a forecast for India’s output growth for key manufacturing industries in 2012 and 2013, and explains why the macroeconomic fundamentals in the country are deteriorating. He discusses recent trends in the exchange rate, investment spending, export growth, and the country’s inflation problem. Cliff also provides a forecast for 11 manufacturing industries within India through 2013. The presentation is approximately 9 minutes long.
MAPI U.S. Industrial Outlook 1Q 2012: A Moderate Pace of Growth Is Expected Following the Winter Boom
by Daniel J. Meckstroth, Ph.D., Vice President and Chief Economist
MAPI forecasts that manufacturing growth will outperform overall GDP growth in 2012 and 2013. There is pent-up demand for consumer durables (particularly motor vehicles), firms are profitable and need to spend more for business equipment, and the rebound in nonresidential construction signals capacity-expanding business investment. Oil and natural gas activity is also contributing positively.
Unfortunately, the boom in production activity in the first quarter of 2012 cannot continue amid sluggish growth in the general economy. The growth rate in manufacturing production will decelerate closer to (but still remain above) the growth rate in the overall economy. Manufacturing production is forecast to increase 5.2 percent in 2012 and 3.3 percent in 2013.
Latin America Manufacturing Outlook 12-13
by Fernando Sedano, Ph.D., Economic Consultant
MAPI’s 2012 predictions for manufacturing production growth in Latin America were revised downward to 3.1 percent (from the previous 4.4 percent estimate) as a result of an ongoing recession among Brazilian factories and a major slowdown in Argentina that offsets Mexico’s solid performance. Manufacturing activity in Brazil and Argentina is suffering from softer domestic demand as well as from inflation-adjusted exchange rate appreciations that are hurting competitiveness, discouraging exports, and motivating foreign-made goods. Mexico’s manufacturers are in relatively better shape, benefiting from strong U.S. demand and resilient domestic demand. We expect our index to grow 4 percent in 2013 as Brazil’s manufacturing output rebounds on the heels of government incentives that will bolster demand.
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