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

Issues in the Brief

Regulatory costs for manufacturing operations have increased by 7.6% per year since 1998 compared with average growth of 0.4% for manufacturing output, according to a report commissioned by MAPI and conducted by NERA Economic Consulting. It also found that 90% of these regulations do not undergo a cost-benefit analysis. "Each year federal agencies layer regulations onto manufacturers, one on top of another, without any transparency or any clue as to the true cost to our factory sector," said Stephen Gold, president and CEO of MAPI. "Such an inefficient system is clearly a drag on manufacturing growth, and therefore overall economic growth."

October 15, 2013 marked the effective date of the first step in a long-awaited substantive reform of the U.S. export control system. The ultimate goals are a single licensing agency, operating under a single list of controlled items, with a single enforcement arm and a single database of sanctioned and denied parties. The new changes represent a significant step toward a more efficient, predictable and transparent export control system.

Neither snow nor rain nor sleet -- nor economic recessions nor financial collapses -- halts the inexorable accumulation of federal regulations on manufacturing activity. While health and safety rules have a critical role to play in an increasingly complex economy, manufacturers need a more cost-effective, coordinated, transparent regulatory system.

I attended the European Manufacturing Strategy Summit held in Warsaw, Poland last week in the dual capacity as jury member for excellence awards and panelist at the accompanying conference.

The November purchasing managers survey from the Institute for Supply Management suggests that U.S. manufacturing is set for a positive finish to a mixed year.

It is increasingly likely that the Eurozone will face a weak recovery and possible stagnation in the years ahead. Economic growth in the region slowed to 0.1 percent in the third quarter compared to the second quarter, a substantial deceleration from the 0.3 percent growth rate from the first to the second quarter.

On September 8, Mexican President Enrique Peña Nieto sent his fiscal reform proposal to the nation’s Congress, which has until November 15 to discuss the bill. This tax reform bill is part of a broader reform agenda that includes the telecommunications, financial, and energy sectors. The overall objective is to make the Mexican economy more competitive by fighting monopolies and freeing up public resources to be redirected to improve the country’s poor infrastructure, lagging education, and rising crime.

Economic Update

Evidence points to a modest reacceleration of manufacturing output growth from a slump in the spring of this year. Output gains in September were fairly narrow, however, coming principally from strong production advances in motor vehicles and machinery. MAPI forecasts that production will increase by 3.2% in 2014 and 4.1% in 2015.

The U.S. energy future is breaking good. The projected energy future circa 2005 was one in which gasoline consumption was expected to grow continually over the long term and oil production was projected to steadily decline.

Reflecting the modest and uneven improvement in global economic activity, recent indicators for Asian economies have been mixed, with the positive regional impact of stimulus efforts in key countries somewhat negated by unusually volatile currency and financial market activity.

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.

The United States runs a trade deficit that is primarily explained by oil imports and a persistent imbalance with China; further, we export roughly the same types of goods that we import. When measured by value, the top six categories closely overlap.

Both the factory sector’s increasing technological sophistication and new production paradigms requiring more process-oriented, team-oriented workers have partially catalyzed a change whereby the share of the manufacturing workforce with a B.A. degree has increased from 16.3 percent in 2000 to 19.9 percent in 2012.

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