Industrial activity shrank from March to May compared to activity from the first three months in 2013, though not enough to suggest the year will not post overall growth, according to a quarterly report from the Manufacturers Alliance for Productivity and Innovation (MAPI).
The MAPI U.S. Industrial Outlook, which analyzes 27 major industrial sectors, showed manufacturing production declined 0.3 percent in March and 0.4 percent in April. However, manufacturing is predicted to grow at a faster rate in the second half of 2013 at modest to moderate rates; MAPI predicts an overall 3.1 percent rate of growth in 2013, increasing to 3.6 percent in 2014. Traditional and non-high-tech manufacturing, which accounts for 95 percent of manufacturing covered by the report, will grow 3 percent in 2013 and 3.5 percent in 2014.
Of the 27 industries covered by the Industrial Outlook, seven are experiencing “accelerating growth,” a recovery phase in the business cycle; 11 are in experiencing “decelerating growth,” an expansion phase; six are experiencing “accelerating decline,” a recession/mid-recession phase; and 3 are experiencing “decelerating decline,” a late recession or mild recession phase.
“The superior growth in manufacturing production earlier this year was due to strong growth in housing starts, auto sales, and inventory rebuilding that disproportionately benefits manufacturing,” said Chief Daniel Meckstroth, MAPI chief economist and the author of the analysis. “When there is a large inventory build in one quarter, however, the gain tends to reverse in the next period and we saw that in March and April. We expect acceleration in the general economy and a rebound in manufacturing production in the second half of this year, but nothing to suggest anything more than a return to modest to moderate growth.”
Click here to view a pdf of the report.