The Manufacturers Alliance for Productivity and Innovation (MAPI forecasts 3.2% manufacturing production growth in 2014 and a 4.0% increase in 2015.
Manufacturing industrial production increased at a 4.6% annual rate in the fourth quarter of 2013 but production fell sharply in January 2014 (down 0.8% from the previous month). The reduction in production activity in early 2014 originated in the fast growth in production late last year that created an inventory buildup, MAPI reports. The need to slow inventory accumulation and the depressing effect of severe winter weather account for the early 2014 production disappointment. MAPI believes, however, that these factors are temporary and do not change the outlook for stronger growth this year and next.
The surge in manufacturing investment is owed to the fact that firms have lots of cash, are profitable, and have relatively high utilization rates. At the same time, the two-year federal budget and debt ceiling agreement have substantially reduced uncertainty.
More on economic conditions for 2014 on Material Handling & Logistics.
Material Handling & Logistics is an NED companion site within Penton’s Manufacturing & Supply Chain group.