A monthly round-up of the MAPI resources available to NFPA members through NFPA's membership in MAPI.

Issues in the Brief
Brazil’s poor growth performance is arguably more of a structural issue than just a cyclical one. Among other structural barriers to growth, the poor quality of infrastructure stands out for an economy the size of Brazil’s. The news for MAPI members is that the authorities may have finally realized that Brazil is in need of a major infrastructure boost, judging by this summer’s announcement of an ambitious concessions program to build and operate roads and railways.
The composite index fell from 61 in June to 56 in September, indicating continued but slowing growth. The individual indexes (with the exception of the Capacity Utilization Index) remain above 50, the dividing line between expansion and contraction, but they all fell in September, further confirming slowing growth. Respondents indicated that they would be negatively impacted if Congress fails to prevent the government from going over the fiscal cliff; out of related concerns, many companies have delayed investment and/or hiring.
During the summer of 2006, real hourly earnings of the U.S. manufacturing workforce fell below the private sector average for the first time since December 1975 and have remained below since. In this edition of Issues in Brief, Cliff Waldman examines manufacturing earnings over time and across industry sectors. He discusses the complex mixture of domestic and global factors that impact U.S. factory sector paychecks and concludes with a policy recommendation.
China’s real estate sector attracts enormous attention from both policymakers and private investors. Residential housing prices rose at an unprecedented pace during 2009-2010, when monetary policy was eased in the wake of the global financial crisis, and a substantial number of banking credits found their way to the property market. Worried about a looming property bubble and the social unrest caused by the worsening housing affordability, authorities have implemented several rounds of tightening measures since 2010, and these appear to have somewhat cooled down the market.  There are still many questions as to how far the price correction in the housing market should go, however. This report discusses recent efforts to more accurately measure housing prices in China and the likelihood of a nationwide housing market collapse in the near future.
The Eurozone crisis continues to ebb and flow, and it is buffeted by political swings that often emerge unexpectedly. This explains why markets and major partners of Europe, such as the United States, often find it perplexing to make sense of Eurozone policy initiatives. Amid the cacophony of statements, proposals, and ad hoc agreements coming out of Europe, it is not easy to decipher the political forces that shape them. The fact is that political risk remains potent and was underestimated in the period leading up to the crisis. This brief note sizes up the political landscape in major Eurozone nations.

Economic Review
by Fernando Sedano, Ph.D., economic consultant

In Brazil, a growth mismatch between consumer demand and industry production has been brought about by years of currency appreciation and rising costs of doing business. Recent government policy changes and a strong agricultural harvest should lead to a growth rebound in Brazil next year. Mexico continues to post solid growth. Argentina, however, has many structural problems. Fernando provides forecasts for GDP and manufacturing production growth in each major Latin American country.

Economic update: What Will Drive the U.S. Manufacturing Outlook?
by Cliff Waldman, senior economist

In spite of the September gain in manufacturing output, the factory sector experienced a 0.9% contraction during the third quarter of 2012, a near mirror image of the 1.0% increase seen during the second quarter. Further, the Purchasing Managers' Index has been flashing disconcerting signs for near-term activity in U.S. manufacturing. One of the most disheartening consequences of the now clear slowdown in U.S. manufacturing output growth is the renewed loss of manufacturing jobs after a relatively strong string of gains that was one of the few bright spots in an otherwise bleak job market recovery.

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This report is made available by NFPA as a service to the fluid power industry and contains information provided by companies in the industry. NFPA does not recommend or endorse any particular use of this report. NFPA, its directors, members and employees are not responsible for errors or omissions in the report or for loss arising from its use and disclaim all warranties and guarantees, express or implied, with respect to the information in this report.