Manufacturing to see moderate growth for 2012

January 13, 2012

The Manufacturers Alliance for Productivity and Innovation (MAPI) Survey for December 2011 fell slightly, to 66 from 67 in the September report, yet the staying power of the industry is evident, according to the organization.

Industry Week reported that this is the ninth consecutive quarter that the index has been above the threshold of 50, the dividing line that separates expansion and contraction in the industry.

"Despite the challenges posed by slower economic growth and continued problems in the construction and financial sectors, the manufacturing sector is the 'Energizer Bunny' of the U.S. economy," Donald A. Norman, Ph.D., MAPI economist, said in the report. "Barring a meltdown in the Eurozone, the U.S. manufacturing sector should continue growing at a moderate pace heading into 2012."

The report found improvement in the forward-looking indices, as the annual orders index moved to 86 in December from 84 in September. The U.S. prospective shipments index also grew, rising to 83 in December from 81.

According to Shop Floor, the survey also asked a series of questions relating to the uncertainties surrounding Europe and its impending debt crisis. Although 97 percent of manufacturers thought that the EU would experience a recession in 2012, three-quarters of the respondents did not anticipate a change in their European strategies moving forward.

Though some of the numbers represented a decline from September to December, including utilization rates, declines in orders and interest rate expectations, the data showed that manufacturers were well above the long-term rates that dictate contraction versus expansion, according to The Journal of Commerce.

The news source reported that current business conditions may have dropped slightly from September to December, but the sector remains healthy and growth may be experienced in the first quarter of 2012.

Research and development spending will increase in the first quarter of 2012, according to the Journal, as companies showed optimism concerning investing more money into the specific arm of their business.

The U.S. manufacturing sector may also benefit from a move away from foreign work due to rising wages in Asia and increased shipping costs. Recent news from China isn't likely to boost confidence for American businesses looking to outsource work, and bringing jobs home is an emerging trend for U.S. companies.