According to several recent reports, manufacturing companies are continuing to reinforce their operations, with demand for U.S. manufacturing space expected to increase this year.
Businesses Are Ready to Invest in the U.S.
CMD, a North American provider of construction data, projected earlier this spring that construction starts in the United States would increase 10.5 percent in the coming year and 4.4 percent in Canada. The expanding manufacturing market, combined with sustainable wage growth and increased business, contributed to the strong forecast.
In 2014, a strong fourth quarter accelerated U.S. construction starts by 5.9 percent, compared to 2013. CMD reports that declining oil prices are helping to reduce inflation, which is also spurring manufacturers to invest in construction projects. Low energy prices as well as a diminished competitive advantage in developing countries such as China also are contributing to the trend. As such, the U.S. has regained its position as an enticing location for value-added manufacturing.
The Manufacturers Alliance for Productivity and Innovation (MAPI) Foundation explains that spending on business equipment and construction stalled during the recession as businesses postponed making investments until their equipment either wore out or growth required additional capacity, which stretched to its peak. The Institute for Supply Management reported that manufacturing grew for the 27th straight consecutive month in March, with production increasing for the 31st consecutive month. MAPI projects that manufacturing production will grow 3.5 percent in 2015, 3.9 percent in 2016 and 3.1 percent in 2017.
Growth for Processing Industries
Despite the expiration of patents, the MAPI Foundation forecasts that pharmaceutical and medicine production will grow 3 percent by 2016, spurred by an aging population and widespread access to affordable health care. Likewise, the ISM notes that food, beverage and tobacco products manufacturers reported growth in February and March of 2015. Recent market research from RnRMarketResearch.com indicates that the global color cosmetics market is estimated to expand at a compound annual growth rate of 4 percent through 2019.