BANNOCKBURN, IL – IPC expects the global economy to expand 6.1% in 2021 and another 4% in 2022, according to a new IPC report from Shawn DuBravac, Ph.D., chief economist.

IPC raised its forecasts in the US, Europe, Mexico, Australia and Taiwan, as vaccination rates increase, and countries fully open their economies. IPC, however, has lowered its forecasts for Japan, India, Indonesia and Turkey.

Economic growth in the US is expected to increase 6.7% this year and 4.4% in 2022, with GDP expanding 9.6% in the second quarter – the strongest quarter of growth since 1978, not including the bounce after the pandemic, says IPC. The third quarter will experience sequential growth of 7.2%. 2021 could be the strongest year for the US since the 1950s, DuBravac says. “What is even more amazing is that growth could arguably stronger were it not for supply shortages that are hurting production and curtailing consumption.”

In the US, automotive production increased 5.7% in May, and output is 4.5% below pre-pandemic levels. Defense and space equipment was down 0.4% for the month, but the sector is up 15.1% over last year and 14.2% over the last two years. Industrial and other equipment grew 0.4% in May and is up 18.9% over last year but down 1.6% compared to two years ago.

Manufacturing capacity utilization in May in the US increased to 75.2%. Computer and electronic production capacity utilization grew to 76.3%, while utilization for motor vehicles and parts rose to 69.4%.

Capacity utilization in electrical equipment, appliances and components fell to 78.8%, while utilization in the aerospace and miscellaneous transportation equipment sector dropped to 68.1%.

The rate of inflation continues to accelerate and is now expected to increase 3.3% in the US in 2021.

GDP in Europe in the first quarter fell 0.3%, after dipping 0.6% in the prior quarter. Manufacturing output rose 0.3% in April in the EU, down 0.7% from two years ago but up 41.7% from 2020. Output is up 0.1% compared to January 2020. The EU’s electronics industry increased in April 4.6%. The segment is now up 34.2% compared to 2020 and 20.9% compared to 2019.

Canada’s economic growth is forecast to grow 5.8% in 2021 and 3.7% next year. Mexico is set to grow 5% in 2021 and 2.9% in 2022, says IPC, while China will grow 8.6% this year and 5.6% in 2022. Europe’s economy performed better than expected in the first quarter, with the region now expected to grow 4.2% in 2021 and 4.1% next year. Japan is set to grow 2.4% this year, the softest growth among the major developed economies.

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