1. U.S. Economic Outlook A Relatively Fast Manufacturing Growth Pace Amid Modest Gains In The Overall Economy Presented by: Daniel J. Meckstroth, Ph.D. Vice President and Chief Economist dmeckstroth@mapi.net

2. U.S. Economic Surprise Index Source(s): Citigroup and Bloomberg Surprisingly Strong Late 2011 and Early 2012

3. The Growth in Manufacturing Production Greatly Exceeded the Growth in GDP in the First Quarter GDP and Manufacturing Growth F=Forecast Source(s): U.S. Bureau of Economic Analysis and Federal Reserve Board Percent Change at Annual Rate

4. Spending on Goods Is Driving Manufacturing Production GDP by Major Type of Product Source(s): U.S. Bureau of Economic Analysis

5. There Is Now Relatively Balanced Job Growth Job Growth By Industry Source(s): Bureau of Labor Statistics

6. Employment Growth Consumers Are Income Constrained Which Limits the Pace of the Economic Expansion Consumer After-Tax Income, Inflation- Adjusted Source(s): U.S. Bureau of Economic Analysis and U.S. Bureau of Labor Statistics and MAPI

7. GDP Expenditure Categories Inflation-Adjusted Percent Change 20112012(F)2013(F) Gross Domestic Product 1.72.2 Total Consumption 2.22.32.2 Durables 8.28.74.1 Nondurables 1.71.41.9 Services 1.41.51.9 Nonresidential Fixed Investment 8.85.87.0 Equipment & Software 10.47.9 Information Processing Equipment 6.27.58.7 Industrial Equipment 12.77.79.3 Transportation Equipment 26.015.79.4 Structures 4.60.34.4 Residential Fixed Investment -1.310.116.1 Exports 6.74.25.0 Imports 4.94.14.2 Federal Government -1.9-2.4-3.0 State & Local Government -2.2-1.6-0.7 MAPI Economic Forecast F=Forecast Source(s): MAPI, May 2012 Pent Up Demand For Consumer Durables, Strong Equipment Investment, Construction Recovery, Tempered By Gov’t Austerity and Net Exports

8. Economic Indicators Percent Change or Level as Specified 20112012(F)2013(F) Prices (% change) Consumer Prices 3.12.11.6 Excl. Food & Energy 1.72.21.8 Producer Prices, Finished Goods 6.01.40.7 Energy ($) Imported Crude Oil ($ per barrel) $102.6$107.6$107.3 Natural Gas Wellhead Price ($mmbtu) $3.8$2.3$2.9 Other Key Measures Nonfarm Inventory Change (Billion 2005$) $44$73$58 Light Vehicle Sales (Million units) 12.714.314.9 Housing Starts (Million units) 0.6100.7461.010 Federal Surplus (NIPA, Billion $) -$1,183-$956-$714 Current Account Balance (Billion $) -$473-$513-$522 Labor Unemployment Rate (%) 9.08.17.8 Payroll Employment (% change) 1.21.5 Production (% change) Manufacturing (SIC Basis) 4.35.23.3 Computers & Electronic Products 7.95.37.7 Non-High Tech Manufacturing 4.25.23.1 MAPI Economic Forecast F=Forecast Source(s): MAPI, May 2012 Low Inflation; Limited Progress on High Unemployment; Cheap Natural Gas, High but Stable Oil Prices; Massive but Shrinking, Federal Debt; and An Above Average Manufacturing Rebound

9. Oil Price Surge o Iran disrupts the Strait of Hormuz o Major supply disruption Financial Contagion From the Eurozone Sovereign Debt Crisis o Pressure building within Greece to leave the Euro o Interest rates rising in Spain and Italy Federal Fiscal Cliff and Debt Ceiling Showdown o January 1, 2013 Spending sequester kick in Bush tax cuts expire Temporary payroll tax cuts expire Emergency unemployment benefits expire o March, 2013 Debt ceiling must be raised Major Risks That Could Derail The Modest Growth in the U.S.