February MAPI/Manufacturers Alliance Forecasts for NFPA Members

Issues in the Brief

Manufacturing Sector Financial Performance

Don explores various financial benchmarks for manufacturing, including stock prices of 120 MAPI companies, return on assets for durable and nondurable manufacturing, net income after taxes and profit per dollar of sales. If, as MAPI forecasts, manufacturing activity grows at a faster rate in 2014 and 2015, the solid financial performance should continue.

U.S. Trade Surplus in Business Services Peaks Out

Despite some experts’ optimistic view that the U.S. trade surplus in business services will serve as a substantial offset to the growing deficit in manufactures, this does not appear to be the case. Compared with manufactures, U.S. exports of business services are relatively small and have been growing at a slower rate since 2009.

Five Developments to Watch in Latin America

Wide-ranging reforms, major sporting events and energy exploration and development will drastically change the Latin American market for U.S. manufacturers over the next few years, triggering trade and investment opportunities.

Disturbing Data on U.S. Skills

While educational achievement data have certainly informed the discussion about workforce adequacy, the question remains as to whether graduation rates are fully adequate proxies for the skills that employers, and particularly manufacturing companies, find to be in short supply.

Economic Update

MAPI Business Outlook: Most Indexes Show Continued Improvement

Most indexes showed continued improvement in December. Current orders increased from 70 in September to 72 in December, prospective U.S. shipments rose from 76 to 79, non-U.S. prospective shipments increased from 70 to 72, backlog orders increased for the third straight quarter (from 59 to 64), profit margins rose from 68 to 72 and export orders increased from 61 to 67.

European Industrial Outlook: Recovery Still Slow and Hesitant

The eurozone’s economic activity remains weak. Industrial production fell in four out of the last six months, unemployment topped 12% and inflation is undershooting the ECB’s target by a percentage point. Domestic demand has contributed virtually nothing to growth and demand for European exports is weakening. Looking forward to 2014 and beyond, we see a gradual improvement in demand for Europe’s manufactured products, boosted by a jump in fixed investment.

Manufacturing Activity January 2014

While many signs for manufacturing were encouraging at the end of 2013, numerous policy uncertainties, such as the gridlock over raising the debt ceiling, regulatory initiatives, monetary policy tapering and uncertain growth in export markets, are likely holding back commitments for business equipment expenditures.

Featured Video: MAPI Economists Review the Manufacturing Outlook

In this 11-minute presentation, four of our economists detail what’s ahead for manufacturing in the U.S., China, Japan, India and the eurozone. In a segment on the U.S. energy outlook, Senior Economist Don Norman notes that oil production is expected to reach 8.5 million barrels per day in 2014, with important implications for manufacturers.

Manufacturing Facts: A New MAPI Production, is a collection of the key facts and figures that define the state of the U.S. manufacturing industry.

Manufacturing Facts: Technological Innovation Addresses Global Climate Change

Manufacturing Facts: Manufacturing Makes a Positive Contribution to Most State Economies

Manufacturing Facts: Both Professional and Semi-Skilled Employees Staff the Non-Production Side of U.S. Manufacturing

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