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

Issues in the Brief

Two Distinct Manufacturing Forecasts for 2025
The United States could, with just a little help from policymakers, experience a manufacturing renaissance in the next decade with profound effects on national living standards. That’s what a new joint study by MAPI and the Aspen Institute forecasts. On the other hand, if it’s business as usual with no policy changes—or, worse, bad policy changes—that resurgence won’t occur. What a colossal missed opportunity that would be.

Manufacturing Resurgence: Modest Policy Shifts Would Have Significant Benefits

MAPI and The Aspen Institute developed a new econometric forecast model showing that there is ample potential for U.S. manufacturing to undergo a resurgence that by 2025 would lead to significantly more good paying manufacturing jobs, add to GDP growth, and help create the first surplus in the nation’s goods and services balance of trade since 1975.  The study found that by focusing on key drivers—exports and imports; capital investments; energy supplies; regulatory and tax policy; and the skills gap for manufacturing workers and researchers—the growth path for manufacturing and the U.S. economy could improve dramatically.

President Obama’s Fiscal 2014 Budget: What It Means for Tax Policy

This week the president is expected to unveil his fiscal year 2014 budget. With all of the current focus on the impact of sequestration, the looming battle over raising the debt ceiling, and the ongoing discussions around tax reform, what will the president’s budget mean for manufacturers in terms of tax policy?  Even if the president’s budget goes nowhere, it is important to examine what is ahead. The budget’s tax proposals lay out the president’s priorities and could serve as a possible a la carte menu of both pro-growth incentives and revenue raisers that could be included in tax reform legislation or unrelated legislation. This is particularly true with respect to the budget’s revenue-raising items.

Survey on the Business Outlook: March 2013
The Composite Business Outlook Index was 56 in March, up from 55 in December. This quarter's increase, while small, is the first increase since June 2010. The small rise in the composite index, coupled with the improvement in both investment indexes and the fact that the Annual Orders Index remains at a fairly high level, indicates that the sharp slowdown of manufacturing activity that began in March 2012 has bottomed out. Continued expansion is expected, although all signs point to a slow rate of growth over the next three to six months.

Energy Consumption Trends in the Manufacturing Sector
Every four years, the Department of Energy's Energy Information Administration surveys manufacturers on their energy use. The prelimi¬nary results of the most recent survey, covering the year 2010, are in the process of being released and show that the manufacturing sector's total energy consumption fell between 2002 and 2010. In addition, the intensity of energy consumption (consumption per unit of production) in the manufacturing sector also fell because of increased energy efficiency and changes in the mix of manufacturing activity.

Economic Review

Manufacturing Activity March 2013
Donald A. Norman, Ph.D., senior economist
In this audiovisual presentation, Don reviews the most recent manufacturing data. The sector's growth in February was fairly broad-based, with durable goods improving by 1.2% and nondurable goods increasing by 0.3%. The largest gain was in automobile products, while the output of primary metals, textiles and printing showed some decline. MAPI forecasts slower growth in the overall economy and in manufacturing in 2013 before accelerating in 2014.

Latin America's outlook: Moderate Growth Ahead
Fernando Sedano, Ph.D., economic consultant
In this presentation, Fernando Sedano presents the industrial forecast for Latin America. Both Brazil and Argentina experienced a manufacturing recession in 2012. Thanks to targeted short-term patches, both countries are seeing a moderate economic and manufacturing rebound this year. Mexico, benefiting from access to U.S. markets, continues to grow at a moderate pace. Fernando is optimistic about real economic reforms in Mexico that will provide medium-term benefits in the pace of growth. Brazil and Argentina, however, are not willing to reform.

Canadian Economic Outlook 2013-2014 -- Slow Growth Lingering
David Boisclair, economic consultant
MAPI Economic Consultant David Boisclair discusses recent economic and industrial conditions and provides forecasts for Canadian manufacturing through 2014. Following very weak growth last year, Canadian GDP growth is expected to accelerate in 2013. The expectation is for stronger growth in the United States to supplement relatively weak domestic demand. Nevertheless, the strong Canadian dollar and government fiscal austerity are major headwinds this year. David provides detailed output by industry forecasts for Canadian manufacturing in 2013 and 2014.

Manufacturing Activity April 2013
The manufacturing industrial production index fell by 0.1% in March after increasing by a strong 0.9% in February. On a year-over-year basis, the index is 2.5% higher than in March 2012. The March decline in manufacturing was broad-based, with 17 of the 25 industries examined posting a decline in production. What cushioned the downturn was that motor vehicles and parts production, a major industry in manufacturing, surged 2.9% in March.

Economic Report

China Manufacturing Outlook 2013-2014
In 2013-2014, the pace of economic expansion is expected to stabilize at around an 8% annual rate as the global economic environment improves and net exports become less of a drag on growth. MAPI revised upward its prediction for China's manufacturing sales revenue growth in 2013 to 23% (from the previous 17%), and it is forecast to expand another 23% in 2014.

Manufacturing Facts: A New MAPI Production, is a collection of the key facts and figures that define the state of the U.S. manufacturing industry.

Manufacturing Facts: The Age Gap Between the Manufacturing and the Non-Farm Workforces Widens
The manufacturing sector appears to be disproportionately experiencing the ramifications of an aging workforce. In 2000, the median age of the manufacturing workforce -- at 40.5 -- was 1.1 years above the median age of the total non-farm workforce. By 2011, this gap nearly doubled.

Manufacturing Facts: Manufacturing is a Leader in Offering Healthcare Benefits
The manufacturing sector is the leader among private sector employers with regard to the share of companies offering health benefits to workers. The weighted average "offer rate" for other industry groups is 57%, below the 69% of all manufacturers. In 2012, 83% of manufacturing employees participated in these employer-financed plans.

Manufacturing Facts: U.S. R&D Spending Lead Over Emerging Markets Narrows
For more than a half-century, the U.S. has led the world in science and innovation, but our country can no longer take its supremacy for granted. Aggregate R&D spending by six large and fast-growing economies for which reliable data exist (Brazil, China, India, Russia, Korea and Taiwan) reached 53% of the U.S. level in 2009, up from 17% just 10 years prior. If current trends continue, R&D spending in these key emerging markets may exceed U.S. levels by the end of this decade.

Manufacturing Facts: Manufacturing Sector Profitability is Cyclical
Profits as a percentage of stockholders' equity fell in the four recessions experienced between 1980 and 2011. Nonetheless, aggregate profits and the rate of profitability rebounded with subsequent economic recoveries. Over this period, the rate of manufacturing sector profitability averaged 12.5% and aggregate profits reached a record high in 2011.

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