Arlington, VA — August 21, 2008 — The weakness in the U.S. economy shows no signs of immediate abatement, and significant challenges may last well into 2009, although exports continue to provide one bright spot for the economy, according to a new report from The Manufacturers Alliance/MAPI.
The organization's "Quarterly Economic Forecast" predicts that inflation-adjusted gross domestic product (GDP) growth will slow to 1.6 percent in 2008 and decelerate to 1.3 percent in 2009. The 2009 GDP forecast is down from 1.9 percent growth projected in MAPI's May report.
"The Internal Revenue Service accelerated the payment of tax rebates this year under the economic stimulus plan, getting cash in consumers' hands earlier than expected," said Daniel J. Meckstroth, Manufacturers Alliance/MAPI chief economist. "The cash windfall is only temporary, and we expect a corresponding decline in spending in fourth quarter 2008 and into early 2009."
Good News for High Tech
Manufacturing production growth is expected to sink into negative territory in 2008, declining 0.5 percent following an already low 1.7 percent growth in 2007. It is forecast, though, to return to positive range, albeit a weak 1.6 percent, in 2009. The previous quarterly MAPI report had forecast production to grow by 0.4 percent in 2008 and by 3.1 percent next year.
Production in non-high-tech industries is anticipated to decline 1.8 percent this year and to grow by 0.2 percent in 2009. There is, however, positive news in the computers and electronics products sector. High-tech industrial production is expected to rise 15.7 percent in 2008 and 14.7 percent in 2009.
Exports Continue to Shine