Expect Modest Manufacturing Growth in 2016 - Modern Distribution Management

Expect Modest Manufacturing Growth in 2016

MAPI forecast calls for acceleration next two years before drop-off.
Eric-Smith-84x84

After a flat year, manufacturing should grow 2.6 percent in 2016 and 3 percent in 2017 before tapering off, according the Manufacturers Alliance for Productivity and Innovation Foundation's most recent quarterly Economic and Manufacturing Outlook.

The strong U.S. dollar's impact on GDP growth, slow price recovery in commodities and China's "economic restructuring" have provided strong headwinds, MAPI Chief Economist Daniel J. Meckstroth said during a webcast last week.t

However, the U.S. still had a manufacturing purchasing managers index (PMI) of 54.1 in October, second only to the United Kingdom (55.5) for the month.

"We're still one of the fastest growing manufacturing sectors in the world," Meckstroth said.

MAPI forecasts GDP growth of 2.9 percent in 2016 and 2.7 percent in 2017 before settling at 2.5 percent the next two years.

Meckstroth also highlighted the strength of nonresidential and residential construction, especially the multifamily sector, which is seeing the biggest jump. Housing starts are "coming up from a very low level," Meckstroth said, but they are projected to rise 19 percent in 2016 and 18 percent in 2017; afterward they will continue to grow but at a slower rate.

That forecast bolsters recent news that building materials and construction continues to outperform other sectors. Not only has the sector enjoyed increased construction spending, but distributors in this category also saw the highest revenue growth (2.8 percent) in the third quarter, according to the most recent MDM-Baird Distribution Survey.

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.