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MAPI QuickPoint - A glance at a building block of worldwide business data  MAPI QuickPoint

Analysis on ISM Index: 
Manufacturing Continues to Outperform General Economy

The following is an analysis from Daniel J. Meckstroth, Ph.D., Chief Economist for the Manufacturers Alliance/MAPI, regarding the Institute for Supply Management (ISM) Index for August 2010 (the ISM Index was 56.3 percent, an 0.8 percentage point improvement over July).

“Manufacturing has consistently outperformed the pace of growth in the general economy during this recovery,” he said.  “For example, GDP increased only at a 1.6 percent annual rate in the second quarter of 2010 but manufacturing industrial production expanded at a 7.9 percent rate.  Amidst evidence that the general economy is slowing to a crawl, this report indicates that manufacturing activity continues to grow at a healthy pace.  Industrial firms are building inventories that were depleted during the recession and exports are surging in machinery and equipment and material industries. 

“The strong growth in manufacturing production is partly catch up for a substantially more severe recession in the industry than the overall economy,” he added.  “Also, the depth and length of the previous downturn built pent up demand for replacing big ticket consumer goods and repair and replacement in business.  We expect manufacturing production to decelerate in the near term but still grow faster than overall GDP.”
  		   

Issues in Brief  Issues in Brief
E-579.pdfShould American Business Worry About Europe’s Eastern Periphery?
In Europe these days, economists zoom their focus on the fiscally challenged Southern periphery to the detriment of the traditional area of concern, namely, Central and Eastern Europe.  In this note, Kris Bledowski applies risk metrics with which analysts follow Greece, Spain, and Portugal to the Czech Republic, Hungary, and Poland.  The "New Europe" comes out in better shape across a number of financial indicators, including fiscal measures, than the Mediterranean rim.  However, the East's lower wealth and less developed financial sectors could still present hazards in times of economic stress.
E-578.pdfPolitics and the Near-Term Economy
A series of major initiatives jump-started the U.S. economy, but now the recovery is stalling.  What to do next, especially in the private sector and assisting small businesses to remain viable when the options are dwindling?
E-577.pdfChina's Rising Labor Costs and the Labor Shortage Puzzle
On the back of the strong domestic economy, China's labor market conditions have improved greatly. However, manufacturers in the coastal area are finding it more and more difficult to find young migrant workers to help fill the export orders.
1 - 3 Next

 News

 MAPI in the News
Manufacturers Alliance forecasts weak recovery
The U.S. economy has slipped into a “slow growth” mode as consumers spend less, save more and try to pay down debt, according to an economic forecast released by the Manufacturers Alliance/MAPI. “There is a somewhat bleaker outlook amid weaker economic data and it clearly indicates a slow growth mode,” said Dan Meckstroth, the organization’s chief economist in a written statement. “For instance, the numbers for June retail trade, inventories, and foreign trade have all come in weaker than the Bureau of Economic Analysis had estimated in the preliminary estimate of second quarter growth. The homeowner’s tax credit has expired. Consumers are not spending as much.”
Jobless Claims Raise Questions About Recovery
A new jobless claims report shows employers just aren't hiring. Why? The answer appears to be that consumers just aren't spending, and that means a slowdown in manufacturing and retail hiring. Daniel Meckstroth, chief economist of the Manufacturers Alliance, said Thursday: "Consumers are not spending as much. They are saving more and repaying debt, which is good for the long run but not the near term."
Markets Fall as Jobless Filings Rise
The reports were the latest to highlight the challenges to the manufacturing sector, which appears to have stopped rebuilding its inventories. “It is not a surge anymore,” said Daniel J. Meckstroth, the chief economist for Manufacturers Alliance/MAPI. “We had a surge in the third and fourth quarters because there was an inventory swing going on.”
New claims for unemployment benefits jump unexpectedly
In its new economic forecast released Thursday, the research group Manufacturers Alliance/MAPI projected that manufacturing production would grow 5.7% this year and 4.7% in 2011. The group, however, sharply cut its forecast for manufacturing employment growth. It projected the factory sector to add 277,000 jobs in 2010 and 373,000 jobs next year, down from the 400,000 and 500,000, respectively, it forecast in its May report.
Fed acts to boost sluggish recovery
The statement by the Fed's Open Market Committee recognizes "that the economy doesn't have enough momentum to create jobs and increase output levels," said Thomas J. Duesterberg, president and CEO of the Manufacturers Alliance/MAPI, a public policy and economics research organization.