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June 11 , 2014

Equipment investment to grow

June 10, 2014 – Manufacturing production continues to outpace overall economic growth and will be led more by investment than by consumer-driven advances over the next 18 months, says the ‘Manufacturers Alliance for Productivity and Innovation (MAPI) Quarterly Economic Forecast’. It predicts that inflation-adjusted gross domestic product will expand 2.5 per cent in 2014 and 3.2 per cent in 2015. The former is a decrease from 2.8 per cent and the latter equal to the 3.2 per cent from MAPI’s March report.

Manufacturing production is expected to fare better, with anticipated growth of 3.2 per cent in 2014 and 4.0 per cent in 2015, consistent with the previous report.

“While consumer-driven manufacturing will grow at a consistently moderate rate, the industries driven by investment will grow at a higher rate,” says Daniel J. Meckstroth, Ph.D., chief economist with MAPI. “Energy infrastructure and manufacturing machinery will see increases as firms replace and expand equipment. Aerospace will also experience a big ramp-up in production. In addition, there will be growth in the construction supply chain – HVAC, wood, paint, appliances, and furniture – as we anticipate both residential and non-residential increases. The acceleration driver will be investment.”

Production in non-high-tech manufacturing industries is expected to increase 2.9 per cent in 2014 and 3.7 per cent in 2015. High-tech manufacturing production, which accounts for approximately five per cent of all manufacturing, is anticipated to grow 6.6 per cent in 2014 and 10 per cent in 2015.

The forecast for inflation-adjusted investment in equipment is for growth of 5.2 per cent in 2014 and 10.3 per cent in 2015. Capital equipment spending in high-tech sectors will also rise. Inflation-adjusted expenditures for information processing equipment are anticipated to increase 2.7 per cent in 2014 and a strong 14.6 per cent in 2015.

MAPI expects industrial equipment expenditures to advance 8.1 per cent in 2014 and 10.8 per cent in 2015. The outlook for spending on transportation equipment is for growth of 5.6 per cent in 2014 and 3.9 per cent in 2015. Spending on non-residential structures is anticipated to improve by 4.2 per cent in 2014 and by 5.1 per cent in 2015. Residential fixed investment is forecast to increase by 4.1 per cent this year and a robust 19.9 per cent in 2015.

Manufacturing production is expected to fare better, with anticipated growth of 3.2 per cent in 2014 and 4.0 per cent in 2015, consistent with the previous report.

“While consumer-driven manufacturing will grow at a consistently moderate rate, the industries driven by investment will grow at a higher rate,” says Daniel J. Meckstroth, Ph.D., chief economist with MAPI. “Energy infrastructure and manufacturing machinery will see increases as firms replace and expand equipment. Aerospace will also experience a big ramp-up in production. In addition, there will be growth in the construction supply chain – HVAC, wood, paint, appliances, and furniture – as we anticipate both residential and non-residential increases. The acceleration driver will be investment.”

Production in non-high-tech manufacturing industries is expected to increase 2.9 per cent in 2014 and 3.7 per cent in 2015. High-tech manufacturing production, which accounts for approximately five per cent of all manufacturing, is anticipated to grow 6.6 per cent in 2014 and 10 per cent in 2015.

The forecast for inflation-adjusted investment in equipment is for growth of 5.2 per cent in 2014 and 10.3 per cent in 2015. Capital equipment spending in high-tech sectors will also rise. Inflation-adjusted expenditures for information processing equipment are anticipated to increase 2.7 per cent in 2014 and a strong 14.6 per cent in 2015.

MAPI expects industrial equipment expenditures to advance 8.1 per cent in 2014 and 10.8 per cent in 2015. The outlook for spending on transportation equipment is for growth of 5.6 per cent in 2014 and 3.9 per cent in 2015. Spending on non-residential structures is anticipated to improve by 4.2 per cent in 2014 and by 5.1 per cent in 2015. Residential fixed investment is forecast to increase by 4.1 per cent this year and a robust 19.9 per cent in 2015.

 

 

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