Expect sustained, slower growth in 2011: PMMI

by Meat&Poultry Staff
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ARLINGTON, Va. – According to the Packaging Machinery Manufacturers Institute’s Fourth Quarter 2010 Economic Outlook, the current economic recovery is sustainable. Although the study predicts the rate of recovery to slow noticeably in the coming year, expectations are that growth will nevertheless continue.

Leading macroeconomic indicators all suggest ongoing recovery through the remainder of 2010 and 2011, the study notes. There are signs of slower growth next year, most notably from the US Leading Indicator and the Purchasing Managers Index, but there is no clear evidence to support a double-dip recession, the study states.

Other study high lights include:

  • Corporate Bond Prices have resumed an upward march after dropping briefly in late 2009.
  • The US Leading Indicator has fallen steeply since it peaked in March. The drop resulted from recent stock market "roller coaster rides," declines in building permits and faster supplier deliveries.
  • The Purchasing Managers Index is also in steep decline off a December 2009 peak. The monthly Index has fallen each month since April, but has stayed in the growth range. New orders, production, and in particular manufacturers prices have seen the most pronounced deceleration.
  • The Money Supply was flat for nine months, with zero change from November 2009 to July 2010. That sluggish growth has not yet acted as a brake on Industrial Production, but is one reason for the expectations of slower growth in 2011.
  • The Industrial Production Index moved into "Phase B" — i.e., growth mode — in July, and is continuing the upward trend. This index is up by 0.8% over this time last year, and leading indicators and internal dynamics point toward continued growth through the end of the year, up until a slowdown in 2011.
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