U.S. GDP, Exports Expected To Climb In The Near-Term
While U.S. industrial production was down one percent year over year, the country’s real GDP grew at a seasonally adjusted annual rate of two percent, says ITR Economics’ June 2016 ITR Advisor. An economic research and consulting firm providing economic information, insight, analysis and proactive strategies, ITR works with PPAI to produce quarterly market outlook reports on the promotional products industry.
ITR attributes the GDP growth to a 3.5-percent increase in wages, and low inflation (1.1 percent) and interest rates. It expects consumer spending to support a further rise in U.S. GDP through at least 2018. Retail sales are up 3.9 percent year-over-year.
Manufacturing for the 12 months through May was up 0.5 percent. The U.S. Purchasing Managers’ Index, which is typically ahead of U.S. industrial production by nine months, has been on the rise and for the past few months has been above 50, which ITR says points to expansion in manufacturing. While ITR expects the manufacturing sector to avoid recession this business cycle, it says decreases in U.S. mining production (8.3 percent) and electric and gas utilities production (two percent) point to an easing trend in industrial production.
ITR predicts that U.S. industrial production should hit its low point in third quarter 2016 and rebound through 2017 due to increases in commodity prices and global demand for U.S. goods. In June, U.S. exports are down 7.9 percent year-over-year, but ITR points to three consecutive months of increases ahead of the annual growth rate as an indicator that the sector will enter a recovery trend soon.
PPAI/ITR industry outlook reports are available here.