ARLINGTON, VA -- The Manufacturers Alliance/MAPI today predicted US manufacturing will likely decline for the next one to two quarters, based on a recent survey of manufacturing executives.

The research firm's quarterly survey found the manufacturing index has slipped to 21, well below the baseline of 50 that represents an industry in recovery.

In a statement, MA/MAPI chief economist Dr. Daniel J. Meckstroth said, “Manufacturing production declined 1.7% in March and was down 15% from one year ago. The manufacturing recession remains widespread with 18 of the 20 major manufacturing industries declining in March and all 20 industries showing current production levels that are substantially below that of one year ago." 

The firm did detect a shift in the slowdown of late, and indicated there is hope for growth by fall.

"Although virtually every manufacturing industry is declining, the vortex of the recessionary tornado seems to be moving from consumer durables to business equipment and metals," Meckstroth said. "The extremely low factory utilization rate -- 65.8% in March -- and widespread slack in the service sector takes away the need for capacity expanding machinery and equipment. Metals are paying the price of destocking."

The economists consensus is that real first-quarter GDP growth will decline at an annual rate in the 4 to 6% range but manufacturing production fell 22.5% annualized on a sequential basis, Meckstroth said. "Recent reports on retail sales, housing activity, and auto sales offer hope that the economy and the industrial sector is forming a bottom and the worst of this recession occurred in the first quarter. We expect the pace of the industrial decline to be much slower going forward and anticipate a return to modest growth early this fall.”

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