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

Issues in the Brief

R&D Support in Canada: State of Play and Recent Changes
MAPI Economic Consultants Anne Motte and David Boisclair review recent changes to Canada’s federal support for R&D and innovation. With the country’s lackluster R&D performance, the need is acute to devise effective strategies that encourage businesses to innovate. The challenge is far from small: Canadian business enterprise R&D has been falling since 2007, in spite of comparatively generous measures. Having supported R&D largely through indirect measures (mainly its R&D tax credit), the government recently opted for a change: beginning in 2014, it will downsize the tax credit and divert the savings to direct measures to support business innovation (mostly grants and partnerships). The future will reveal if this nascent paradigm shift is what Canada needs to stay in the innovation game.

A To-Do List for the President
The campaigning and election are (at long last) over; the electorate has spoken. Time for President Obama to turn his full attention to the economic recovery, and more specifically to helping build a stronger, more dynamic American manufacturing base. The pro-manufacturing initiatives of his first term—and there were actually quite a few, including creating an Advanced Manufacturing Partnership, a manufacturing skills certification system in community colleges, and a National Additive Manufacturing Innovation Institute—were sensible, but they were baby steps.

The NLRB Considers the Legality of Employers' Social Media Policies
Over the course of the past year, the acting general counsel of the National Labor Relations Board issued three reports analyzing various employers' social media policies. These reports demonstrate that even seemingly sensible limitations can violate the National Labor Relations Act via defined or implied restrictions on employees' statutorily protected rights to discuss with each other the terms and conditions of their employment. All employers -- including those operating non-union facilities -- must be especially careful to avoid overly broad, ambiguous or unlawful language in social media policies.

The U.S. Trade Deficit in Manufactures Continued to Rise in the Third Quarter
The U.S. trade deficit in manufactures increased by $23 billion, or 7 percent, during the first three quarters of 2012, compared with 2011, while the Chinese surplus was up by $74 billion, or 16 percent. Over the past three years, the U.S. deficit is projected to have risen by 52 percent, to $495 billion in 2012, and the Chinese surplus by 81 percent, to $764 billion. A final comment addresses where the trade imbalances are likely to go in the year ahead.

From the Blog: Playing Defense
Uncertainty is the word of the day for U.S. manufacturers as problems continue to build in key regions of the world while a budget drama with a questionable ending plays out in Washington. The economic impact is most clearly seen in the significant recent weakening of capital spending, a broad and often volatile category of business expenditures. Capital spending is something of a misunderstood variable and in the 1930s, John Maynard Keynes tried to divest economic thinkers of the notion that business fixed investment is entirely a function of calculation. Animal spirits and gut-level entrepreneurial sentiment play a role.

Economic Review

European Regional Disparities On the Rise
Krzysztof Bledowski, Ph.D., Senior Economist
Continued malaise is likely in manufacturing and construction in the Eurozone. Industrial production will fall some 2% this year and rise just under 1% in 2013. There are, however, large regional differences in economic performance. Across Europe, the external current account remains imbalanced.

U.S. Economy: Moderate Growth Requires a "Fiscal Cliff" Compromise
Daniel J. Meckstroth, Ph.D., Vice President and Chief Economist
The central theme of MAPI's forecast for the next five years is that we believe the U.S. economy is in the midst of a transition period from sluggish growth to a longer period of moderate growth. For a smooth transition, politicians must (1) compromise and not go over the "fiscal cliff," (2) raise the debt ceiling early next year and (3) agree on a plan for meaningful long-term federal deficit reduction.

China’s Economic Growth in 2012 and 2013
Yingying Xu, Ph.D., Economist
In this audiovisual presentation, Economist Yingying Xu provides the forecast for China’s economic growth in 2012 and 2013. She explains why China’s economic growth will slow down, and why the more likely case is for the country to observe a soft (rather than hard) landing. The growth pace of industrial value-added decelerated from 14 percent in 2011 to around 9 percent in the third quarter. Even this number may be overreported considering the dramatic growth deceleration in power production, which is highly correlated with industrial production. In October, however, the growth pace for both industrial production and power generation accelerated slightly, showing some encouraging signs of upturns. She also provides a forecast for 2013 industrial growth in China.

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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.