Manufacturing industrial production was unchanged from the third to the fourth quarter of 2015, according to the MAPI Foundation's U.S. Industrial Outlook, a quarterly report that analyzes 27 major industries. The MAPI Foundation is the research affiliate of the Manufacturers Alliance for Productivity and Innovation.
The analysis indicates that factors such as high inventories, a strong dollar, falling commodity prices and risk aversion have not dissipated and are the cause of this slow growth.
The month-to-month change in manufacturing production fell 0.2 percent in both November and December and then surged 0.5 percent in January (largely due to a 2.8 percent increase in motor vehicles and parts production).
On a month-to-month basis, the pattern of growth is very erratic. Over the last nine months, manufacturing has followed a pattern of declining for two months and then posting one strong month; a surge in motor vehicle production typically leads the rebound.
The MAPI Foundation forecasts manufacturing production growth of 1.1 percent in 2016, 2.4 percent in 2017 and 2.5 percent in 2018.
"Strong employment growth amid little inflation boosts consumer income and spending," said MAPI Foundation Chief Economist Daniel Meckstroth. "Motor vehicle and housing supply chains are the driving force offsetting the deep recession in mining and energy capital spending and the pervasive drag of a strong dollar."
The report offers specific economic forecasts for 23 of the 27 industries. The MAPI Foundation anticipates that 13 will show gains in 2016, eight will decline, and two will remain flat. The outlook improves for 2017, with growth expected in 19 industries, led by housing starts at 16 percent.
Non-high-tech manufacturing production (which accounts for 95 percent of the total) is anticipated to rise by 1 percent in 2016, 2.4 percent in 2017 and 2.2 percent in 2018.
High-tech industrial production (computers and electronic products) is projected to expand by 2.3 percent in 2016, 3.1 percent in 2017 and 5.3 percent in 2018.
Meckstroth reported that 6 industries are in the accelerating growth (recovery) phase of the business cycle, 10 are in the decelerating growth (expansion) phase, 10 are in the accelerating decline (either early recession or mid-recession) phase, and 1 is in the decelerating decline (late recession or very mild recession) phase.
