According to PMMI's Third Quarter 2011 Economic Outlook, the forecast for 2011 has improved slightly, but the outlook for 2012 remains largely unchanged. The report, produced for PMMI by The Institute for Trends Research, increases the outlook by +0.7 percentage points, an upward revision spurred by revised data from the U.S. Federal Reserve Board.
• Leading indicator trends point to slower growth for the remainder of 2011 and early 2012. The U.S. Leading Indicator has not reached its cyclical low, but its rate of change (4.1 percent) signals slower growth - not recession - over the upcoming three to four quarters.
• The report predicts an "imminent" transition to Phase C of the business cycle, and also says the rise in Industrial Production will slow gradually through the end of 2011 and into the first quarter of 2012. During remainder of 2012, however, the report predicts economic growth will sustains an increase in Production.
• Total Industry Capacity Utilization reached 77 percent in March, a 30-month high. Despite a slight slip in April, the trend has remained on the increase, a positive sign for the economy, but is still 3.9 percent below the historical average.
• The Purchasing Manager's Index is 1.3% above the same period last year, and the 1/12 rate-of-change has yet to form a low.
• The Corporate Bond Prices trend shows the prolonged period of low interest rates has been favorable for businesses as well as consumers. Interest rates have increased by 0.8 percentage points since their low point in 2010.
PMMI Quarterly Economic Outlook reports are produced by the Institute for Trends Research for the benefit of PMMI Members. The reports, and supporting webinars, are available to members at no charge. More information about the report can be obtained from PMMI at www.pmmi.org or 703-243-8555.