Research Group Forecasts Manufacturing Strength In 2005, 2006

ByJohn S. McClenahen While some economists remain cautious about the strength of the overall U.S. economy going into 2005, the Manufacturers Alliance/MAPI foresees steady growth in the manufacturing sector next year and the year after. "A broad-based manufacturing expansion is under way. We are optimistic that moderately strong production growth will occur across many industries in 2005 and 2006," says Daniel J. Meckstroth, chief economist for the Arlington, Va., business and public policy research group. "We believe that there are five growth themes over the next couple of years," he relates. "Solid growth is expected for industries supporting the growth themes of defense spending, information-technology spending, machinery investment, medical spending and freight movement." The alliance foresees double-digit growth in 2005 and 2006 for four industries: mining, oil field and gas field machinery (19% in each year); communications equipment (14% in 2005 and 19% in 2006); computers (13% in 2005 and 17% in 2006); and metalworking machinery (11% in each year). Four other industries are expected to grow in single digits of 5% or higher. They are: industrial machinery (8% in 2005 and 7% in 2006); pharmaceutical and medicine production (6% in each year); private nonresidential construction (6% in 2005 and 5% in 2006); and medical equipment (5% in 2005 and 6% in 2006). Only housing starts are forecast for negative change in 2005 and 2006, falling 6% each year, says the alliance.