posted on 08.06.14

The MTI index of billings for the second quarter of 2014 totaled 372.0 (index number based on 2007 = 1200) compared to the first quarter total of 337.6. When adjusted for seasonal variations* this is a gain of 7.2%. The second quarter was 4.1% above the year-ago second quarter and the 12-month total was 2.6% above the previous 12 months.

The first quarter of 2014 was marked by a series of severe storms across the eastern United States. While winter is expected to bring a few bouts of bad weather, this was enough to affect the overall economy. Not all sectors were affected equally, with housing, retail, and auto sales especially hard hit. The good news is that the second quarter has largely made up for the losses in the first. The Gross Domestic Product was down a surprisingly large -2.1% in the first quarter but then recovered with 4.0% growth in the second quarter. Other sectors have had similar recoveries. The second half of 2014 is starting with the economy back on track.

The forecast model is unchanged and continues to expect that the next business cycle high will occur toward mid-2015. Some growth curves may be distorted by lower-than-expected first quarter 2014 data. The economy should continue to grow over the next two years and then dip to a mild low toward the end of 2016. This will not be a recession and many growth curves will not become negative.

MTI billings are rising after passing a brief slowdown at the end of 2013. Growth is expected to remain positive for at least the next two years. The second quarter more than made up for the slow start to the year, and the forecast now calls for 2014 to end 3.7% above 2013. This will be followed by 6% gains in 2015.

To see the full 4 page report with supporting graphs, log in to the MTI Members Only Area and click on Heat Treat Outlook report in the featured resources box.