MAPI: Equipment Investment to Grow 5.7% in 2014



The outlook for the U.S. economy is for steady growth but there is little expectation for a significant upward trajectory, according to a new report.

The MAPI Foundation, the research affiliate of the Manufacturers Alliance for Productivity and Innovation, released its quarterly economic forecast, predicting that inflation-adjusted gross domestic product will expand 2.2% in 2014 and 3.0% in 2015. The former is a decrease from 2.5% and the latter a decline from 3.2% in the previous report. GDP is forecast to grow by 3.3% in 2016.

The forecast for inflation-adjusted investment in equipment is for growth of 5.7% in 2014, 8.3% in 2015, and 7.2% in 2016. Capital equipment spending in high-tech sectors will also rise. Inflation-adjusted expenditures for information processing equipment are anticipated to increase 4.0% in 2014, and by double digits in each of the next two years: 11.9% in 2015 and 10.2% in 2016.

“The economy is somewhat constrained by credit availability and risk aversion,” said MAPI Foundation Chief Economist Daniel J. Meckstroth. “Consumers are driving growth but can’t go much faster. Business investment is the one area that can accelerate yet firms have been reluctant to spend. There is a lot of uncertainty in the marketplace, and we seem to be inundated by negative news, such as about the EU flattening out, a worsening U.S. trade deficit, and whispers that the Fed is at least thinking about raising rates.”

To view the full MAPI Foundation article, click here.


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