political wrangling on Capitol Hill and fluctuating employment reports, what
can the industrial community anticipate in terms of a production outlook for
this year and beyond? The forecast has some encouraging signs, more than one
might expect in light of a gross domestic product (GDP) that increased only 0.4% in the fourth quarter of 2012. An ideal growth rate, one that also keeps
inflation in balance, should be at least two percentage points higher.
with some stagnation in production output, though, Industrial Info Resources
Inc. cites growth activity in numerous industries, particularly manufacturing.
According to data from its North American industrial database, IIR notes that
more than 200 grassroots plants were slated to begin operations in the first
quarter of this year, yielding a potential for 17,000 new jobs in the United
States and Canada.
more than $2.7 billion in project activity is scheduled for startup in the
second quarter, which is expected to create 6,700 jobs nationwide. Aside from
manufacturing, the food and beverage, oil and gas, metals and minerals, and
pharmaceutical-biotech industries have the most planned expansion opportunities
for both quarters. And as in previous years, the Southeast and Mid-Atlantic
regions are expected to outpace other U.S. regions in plant startups.
is some recent industrial expansion news as reported by Industrial Info:
- More than 230
construction projects for the chemical processing industry are likely to begin in
2013, with a total investment value exceeding $11 billion.
Metalpha USA Inc., a subsidiary of Bridgestone Americas Holdings Inc., has started
construction on a $75 million expansion of its tire cord-manufacturing plant in
- Despite weak
metal prices and a difficult 2012, Alcoa Inc. has seen improvement during the first
quarter of 2013 and is reporting stronger profits, with more than $6 billion in
- For 2013, about $982
million in industrial manufacturing projects are set to launch between April
and June in the Great Lakes region.
- The U.S. oil and
gas industry will spend about $40 billion this year, exceeding the $33 billion expended
a different front, a recent quarterly business outlook survey by the Manufacturers Alliance for Productivity and Innovation
shows a slight improvement over previous quarterly reports, implying that the
manufacturing sector is holding steady during an uncertain economy. MAPI’s March
composite index advanced to 56 from 55 in the December 2012 survey, breaking a
string of 10 consecutive quarterly declines.
“The March survey results offer
a mixed bag,” says Donald Norman, MAPI senior economist and survey coordinator.
“On the positive side, the composite index ended a long slide, and there is
good news in the upswing in the investment indexes and in the profit margin
index. Most of the other indexes, however—including current orders,
prospective shipments, exports, backlog orders, and capacity utilization—all
fell. The outlook over the next three to six months remains the same: growth at
a slow pace.”
Japan’s announcement that it will join the
Trans-Pacific Partnership negotiations, the National Association of
Manufacturers applauded the move. Canada and Mexico have already signed on to
the negotiations on a comprehensive basis. NAM President and CEO Jay Timmons emphasizes,
“A successful and ambitious TPP agreement will open up new opportunities in
overseas markets and eliminate barriers for U.S. exports, sustaining and
creating jobs for American workers.”
NAM points out that significant work
still remains to ensure that U.S. manufacturers gain a level playing field and meaningful
access to Japanese markets and other venues. The Business Roundtable touts
balanced trade for both imports and exports, which supports more than one in
five American jobs. Moreover, U.S. exports account for nearly 14% of the GDP, and an estimated 61% of imported
goods are inputs or components used by U.S. companies.
its National Activity Index report, the Chicago Federal Reserve stated that
industrial production rebounded in February from lower statistics a month
earlier, increasing 0.8%. The modest increase helped boost
manufacturing’s contribution to the NAI by 0.34 points, a reversal of a 0.30
decline in January.
as 2013 moves forward, Industrial Info is observing some changing trends in
planned projects and industrial spending. On the whole, IIR says the value of
active projects in North America has declined 7% annually for the
last several years, falling from $482.28 billion in January 2012 to $449.92
billion January 2013. The larger upticks have been in the petroleum refining
industry ($12.6 billion) and the chemical processing industry ($10.9 billion). Planned
projects may not always move forward, IIR explains, because contractions in
product demand, financing issues, and other mitigating circumstances can often lead
to project fallout in industrial spending.
course, market trends and perceptions also play an important role in forecasting
industrial activity. For instance, global automotive sales have been healthy in
2013, up nearly 7% over last year in the United States alone.
Industrial Info reports a sales volume projection that could reach 17 million
units by the end of the year, matching pre-recession sales figures. Surprisingly,
although numerous vehicle recalls have been well-publicized worldwide for the
last several months, total sales to date have not been adversely affected by issues
the computer industry is not reflecting the same marketplace success as its
automotive counterpart. Hewlett-Packard, Dell, and Intel have shown steady
losses in worldwide sales of desktop PCs, according to the International Data
Corporation. The 76.3 million PC shipments during the
first three months of 2013 is a decline of about 14% from the same
period in 2012, far exceeding analysts’ loss predictions of more than 7%. One of the reasons for this decline, IDC contends, is that Microsoft’s
new Windows 8 “touch” operating system, with its radical changes to the user
interface, has made PCs less attractive in terms of costs and familiarity as
compared to tablets, smartphones, and other mobile devices.
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