As the U.S. trade deficit in manufactures rose in the third quarter while the Chinese surplus remained flat, it incurred an estimated trade-related loss of 150,000 American jobs, and heading toward more than 600,000 for the calendar year.
Inventory is often considered the most valuable category of assets on manufacturers’ books. Since it has its downsides—tying up large amounts of cash and sometimes diminishing in value—it is common practice to minimize inventory as much as possible without hurting customer service levels.
The overall outlook for the U.S. economy, with particular emphasis on the manufacturing sector, for the remainder of 2015 and 2016 highlighting manufacturing’s growth and challenges for a five-year horizon.
Manufacturing production grew 1.8% in 2015. We predict manufacturing production will increase 2.6% in 2016, 3.0% in 2017, and 2.8% in 2018. At that point, any output gap from the 2008-2009 recession will have closed and manufacturing growth will slow down to potential. The forecast is for growth of 2.6% in 2019 and 2.0% in 2020.
Global Economy, Economic Environment, Regional Economic Integration, Money & Finance, GDP
Domestic demand has emerged as the decisive driver of economic activity in Europe. Business investment is near a takeoff that will bolster industrial production and consumer income beyond 2016. Factors that could derail this sunny outlook include the re-emergence of the Greek default and possible policy disagreements within the EU on Russia, the Middle East, or refugees.
U.S. manufacturers have faced numerous challenges in 2015, including a stronger dollar, heightened uncertainty about slowing economic growth in China and the dramatic fall in the prices of oil and natural gas which has proven to be a two-edged sword.
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