2012 State of the Industry: Manufacturing Carries the Load

Insights for Strategy and Planning: In our deepest survey ever, fabrication and metalworking executives share their personal assessments of the current state of business, the market sectors they see with the most business activity, the critical issues and major trends that are developing within the industry, and how advancements in technology are changing how companies will compete during the coming year.

While experts across the country project the overall U.S. economy to grow at a slow pace because of ongoing challenges in major markets, virtually all of the fabrication and metalworking sectors that support those markets remain relatively strong – though cautious – as we enter the New Year.

As we enter the New Year, the U.S. economy has recently experienced constant improvement, with the unemployment rate declining to 8.6 per cent at the end of November. Many economists now forecast that economic growth will be raised to 3 per cent in the final quarter of 2011. However, the U.S. Federal Reserve reiterated in mid-December that the nation’s economy would continue its slow growth during the following several quarters, well into 2012.

“The housing market will probably remain relatively dormant, and export demand is also likely to be slow due to the slowdown in Europe,” notes Jeffrey Lacker, the president of Federal Reserve Bank of Richmond (Richmond, VA). He estimates that the U.S. economy would advance 2 to 2.5 percent in 2012, saying there will be no need of additional stimulus because inflation is expected to meet central bank goals. “A recent cooling in prices is likely to prove as transitory as did the acceleration we saw earlier in the year. Despite this year’s run-up, I believe the inflation outlook is reasonably good.”

But Brian T. Moynihan, the chief executive officer of Bank of America (Charlotte, NC), speculating that companies do not feel the certainty of opportunity to make big investments, says, “2012 will be another year that’s a grind in the economy. The U.S. economy might expand about 2.1 percent because the labor market will not improve ‘a lot’ during the year.”

While the economists dwell on anemic growth and expect the overall economy to putter along through the coming year, the manufacturing executives we surveyed from the metalworking and fabrication sectors paint an entirely different economic portrait, a world where their state of business remains strong and looks good to very good for the coming year.

In the following articles of our deepest survey ever, these executives share their personal assessments of the current state of business, the market sectors they see with the most business activity, the critical issues and major trends that are developing within the industry, and how advancements in technology are changing how companies compete. See how these insights help you in your planning and strategy for 2012.