Copyright © 2005 Global Insight, Inc. The Many Faces of the US Manufacturing Sector Frantz Price...
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Copyright © 2005 Global Insight, Inc. The Many Faces of the US Manufacturing Sector Frantz Price Managing Director, Analytic Forecasting Division Washington, DC June 8, 2005
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Copyright © 2005 Global Insight, Inc.3 Manufacturing Activity has Bounced Back
Transcript of Copyright © 2005 Global Insight, Inc. The Many Faces of the US Manufacturing Sector Frantz Price...
Copyright © 2005 Global Insight, Inc.
The Many Faces of the US Manufacturing Sector
Frantz PriceManaging Director, Analytic
Forecasting Division
Washington, DCJune 8, 2005
Copyright © 2005 Global Insight, Inc. 2
Presentation Outline
Manufacturing activity in the US has rebounded from its longest period of weakness in years. But, what’s ahead? Production Employment Prices
Best and worst industry performers
Copyright © 2005 Global Insight, Inc. 3
Manufacturing Activity has Bounced Back
US Manufacturing vs. GDP
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
% C
hang
e
GDP
US Manufacturing
Copyright © 2005 Global Insight, Inc. 4
…Driven by Investment-related Products
Output by Product Category
-8.0-6.0-4.0-2.00.02.04.06.08.0
10.0
Consumer Investment Materials
% C
hang
e
2001 2002 2003 2004 2005 2006
Copyright © 2005 Global Insight, Inc. 5
However, Manufacturing Employment has Plunged
Production & Employment
14.0
14.5
15.0
15.5
16.0
16.5
17.0
17.5
18.0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Mill
ions
80
85
90
95
100
105
110
115
120
125
130
Inde
x 19
97=1
00
Employment (left)Output (Right)
Copyright © 2005 Global Insight, Inc. 6
…While Productivity has Surged
Productivity & Employment
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
% C
hang
e
14.0
14.5
15.0
15.5
16.0
16.5
17.0
17.5
18.0
Mill
ions
Productivity (left)
Employment (right)
Copyright © 2005 Global Insight, Inc. 7
Investment-Related Products Carry the Lion’s Share of Manufacturing Employment
Employment by Product Category
0.01.02.03.04.05.06.07.08.0
Consumer Investment Materials
Mill
ions
2001 2002 2003 2004 2005 2006
Copyright © 2005 Global Insight, Inc. 8
Materials Prices have Soared, but Pass-through Impact is Generally Moderate
Prices (Core) by Product Category
-2.0-1.00.01.02.03.04.05.06.07.0
Consumer Investment Materials
% C
hang
e
2001 2002 2003 2004 2005 2006
Copyright © 2005 Global Insight, Inc. 9
Industries with Fastest/Slowest Output in 2005 – 2006
Fastest Production, Average Annual Growth
Computers/Semiconductors 17%Medium/Heavy Trucks 17%Communication Equipment 14%Navigational/Measuring Equip. 8% Medical Equipment & Supply 8%
Slowest Production, Average Annual Growth
Apparel -8%Textiles -5%Leather -4%Tobacco -3%Wood Products -2%
Copyright © 2005 Global Insight, Inc. 10
Which Industries will Add/Cut Jobs in 2005 – 06?
Add Employment, Average Annual Growth
Nonmetallic Mineral Products 2.5%Machinery 2.4%Fabricated Metal Products 1.8%Miscellaneous Manufacturing 1.7% Food Manufacturing 0.4%
Cut Employment, Average Annual Growth
Apparel -8.4%Textiles -6.7%Tobacco -1.5%Wood Products -1.2%Furniture -0.4%
Copyright © 2005 Global Insight, Inc. 11
Manufacturing Sector Outlook — Bottom Line
Production growth slows compared with 2004 Investment remains primary engine of growth Overall manufacturing employment stays stagnant Materials prices peak — finished goods price inflation
remains moderate Cost containment is still a key management focus Capacity expansion is limited Productivity gains decelerate but stay strong
