Manufacturing Sector Recovery On Track

The U.S. economic outlook continues to show improvement but while the manufacturing recovery is on track, cautionary flags remain for the overall economy. The Manufacturers Alliance/MAPI Quarterly Economic Forecast predicts that inflation-adjusted gross domestic product will expand by 2.7% in 2011 and by 2.9% in 2012.

The 2011 forecast represents a downgrade over the previously estimated 3.2% growth, while the 2012 forecast is down slightly from the 3% growth anticipated in the February 2011 quarterly report.

“The economy is continuing to grow at a moderate pace with consumer durable goods, business equipment, and exports leading the way,” said Daniel J. Meckstroth, Ph.D., Manufacturers Alliance/MAPI chief economist. “Rising oil prices and government austerity at all levels, however, give pause to any excessive optimism.”

Manufacturing production will outpace the overall economy and is expected to show 6.2% growth in 2011 and 4.2% growth in 2012. Manufacturing is expected to see a hiring increase with the sector forecast to add 288,000 jobs in 2011 and 374,000 jobs in 2012.

Industry executives are remaining positive, with 90% of manufacturers and distributors optimistic about their future, according to the spring 2011 McGladrey® Manufacturing & Distribution Monitor.

Issued by RSM McGladrey Inc. and McGladrey & Pullen, LLP — which combined are one of the nation’s largest providers of assurance, tax, consulting services and which operate under the McGladrey brand — the Monitor also found that 45% of companies are thriving and growing; twice as many compared to last year and the highest instance since 2007.

“Manufacturing continues to be the North Star of the U.S. economy and the Monitor confirms that companies are back in business,” said Karen Kurek, national manufacturing lead for RSM McGladrey. “Manufacturing directly employs an estimated 12 million and has added approximately 250,000 jobs since December 2009, so these results are very encouraging.” ◆