The Manufacturers Alliance/MAPI projects a moderate growth trend through 2006 for the U.S. economy and expects the manufacturing sector to slightly outpace the overall economy, but the pace of growth in both sectors is likely to decelerate somewhat in relation to a strong 2004.
The Manufacturers Alliance/MAPI Quarterly Economic Forecast predicts inflation-adjusted gross domestic product (GDP) growth to be 3.4% in 2005 and 3.3% in 2006, unchanged from the November 2004 forecast.
"Economic growth will transition from being primarily led by housing and consumer spending to more broad-based growth that includes business investment and exports," said Daniel Meckstroth, chief economist for the Manufacturers Alliance/MAPI.
Manufacturing activity should continue to grow faster than the general economy, with industrial production growth expected to increase 3.5% in 2005 (down from 4.1% in the November forecast) and industrial activity is predicted to accelerate to 3.6% growth in 2006 (down from 5% in November). The largest percentage gains will come in the high-tech sectors of manufacturing. Non-high-tech industries will grow moderately this year and next at 4% and 3.6%, respectively.
The forecast also envisions the unemployment rate remaining stable at 5.2% in 2005 and 2006.
