The Manufacturers’ Alliance for Productivity and Innovation downgraded its economic outlook for 2012 and 2013 in its most recently quarterly economic forecast, citing looming uncertainty over the U.S. economy and declining conditions in Europe and Asia as key reasons for a dim outlook.
MAPI predicts 2% and 1.7% economic growth in 2012 and 2013, respectively, down from an earlier forecast of 2.2% growth for both years.
“The annual growth rate will decelerate as the pace of business equipment spending slows,” Daniel J. Meckstroth, MAPI’s chief economist said in announcing the report this week. “While there is pent-up demand for replacing worn equipment, productivity-improving investment, and capacity expansion, it is the uncertainty about the ‘fiscal cliff,’ declining business activity in Europe, and worries about a hard landing in China that are holding back longer-term commitments.”
MAPI expects manufacturing production to mirror the trend in general economic growth, slowing to 4.5% and 2.3% in 2012 and 2013, respectively, compared to the group’s previously estimated 5.2% and 3.3% growth for each year. This follows a big drop in second-quarter growth this year. Manufacturing production grew a healthy 10% in the first quarter—helped by a mild winter and inventory rebuilding—but was followed by 1% growth in the second quarter.