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A Relatively Sluggish recovery expected in 2010. Presented by Dan Meckstroth Chief Economist [email protected]. Widespread Excess Capacity in Manufacturing. Manufacturing Capacity Utilization. Capacity Utilization By Industry. Source: Federal Reserve Board. - PowerPoint PPT Presentation
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Widespread Excess Capacity in Manufacturing
ManufacturingCapacity Utilization
Source: Federal Reserve Board
Capacity Utilization By Industry
Industry Percent Chg.Dec.
2007Oct. 2009
Primary metal 86 57 -29 Machinery 79 57 -22 Motor vehicles/parts 70 51 -19 Wood product 68 51 -18 Fabricated metal 80 63 -17 Plastics/rubber 83 68 -16 Computer/electronic 76 63 -13 Paper 84 75 -9 Aerospace 84 76 -8 Electric power 85 79 -7 Mining 91 84 -7 Chemical 79 73 -6 Petroleum/coal prds 87 83 -4 Food 82 81 -1
Global Exports Bottoming Out
United States and World Exports of Goods, Inflation-Adjusted
Source: CPB Netherlands Bureau for Economic Policy Analysis
Nonfinancial Corporations Have Surplus Cash
Nonfarm Nonfinancial Financing Gap*
Source: Federal Reserve Board*Capital expenditures less the sum of US internal funds and inventory valuation adjustment
Diverging Business Investment Patterns in 2010
Business Investment, Inflation-Adjusted
Source: U.S. Bureau of Economic Analysis , MAPI Simulation of IHS Global Insight ModelF=Forecast
Nonresidential Construction Continues To Decline
Nonresidential Construction
Type Percent Change
2009 2010 2011
Nonresidential Structures -18 -16 +1
Commercial and Health Care -30 -21 +24
Manufacturing +27 -30 -18
Other Structures -9 -13 0
Construction By Type
Source: Left – U.S. Bureau of Economic Analysis, Right – MAPI Simulation of IHS Global Insight Model
Most Industries Are In Recession Phase Relative To One Year Ago
Source: MAPI
Cyclical Position of Business Investment Industries in Third Quarter 2009
Capital Equipment Industries Were Pulled Into Recession
Percent Change Percent Change
Industry 2009 2010 2011 Industry 2009 2010 2011
Elec. Equip. exceptAppliances -12 2 9
MetalworkingMachinery -24 0 12
Architec. & Structural Metals -18 -9 3 Industrial Machinery -35 4 18ConstructionMachinery -28 1 8
Commercial, Service &Other -17 1 13
Engines & Turbines -29 1 24 Forging & Stamping -20 3 13
Agricultural Equipment -9 -3 5Aerospace Products & Parts 1 2 8
Drilling Equipment -21 -6 4 Ship & Boat Building -13 -1 -2
Source: Federal Reserve Board, MAPI Simulation of IHS Global Insight Model
Investment-Related Manufacturing Production
Forward-Looking Manufacturing Indicators Improve
Manufacturing Production and Purchasing Managers’ Production Indexes
Source: Federal Reserve Board, Institute for Supply Management
U.S., Japanese, and Canadian Manufacturing Recovering From Severe Recession
Industrial Production By Country
Source: Left – OECD, Right – Consensus Forecasts, MAPI
Industrial Production By Country
Country Percent Change
2009 2010
United States -10 +4
Canada -12 +2
Japan -22 +11
Asia Outside Japan Leads Manufacturing Recovery
Industrial Production By Region
Source: Left – OECD, Right – Consensus Forecasts, MAPI
Industrial Production By Region
Region Percent Change
2009 2010
Euro Zone -14 +3
Asia ex. Japan +6 +10
Latin America -7 +5
A Severe Global Recession Followed By Strong Initial Recovery
World Industrial Production
Source: CPB Netherlands Bureau for Economic Policy Analysis, Consensus Forecasts, MAPI
World Industrial Production
