1. Economic and Manufacturing Outlook Presented by: Dan Meckstroth, Ph.D. Vice President and Chief Economist dmeckstroth@mapi.net

2. Yuan and Euro Exchange Rates Source(s): U.S Bureau of Labor Statistics and MAPI Euro Appreciation Has More Impact on the U.S. Than The Yuan

3. Manufacturing PMI Source(s): Left – China’s Bureau of Statistics Right - China Federation of Logistics and Purchasing and HSBC China Manufacturing Production Weaker Than Reported Power and Steel Production and Industrial Value-added

4. Change in Prices by Commodity *U.S. Hot Rolled Sheet and Strip Source(s): Left – IMF, Right – IMF and U.S. Bureau of Labor Statistics Deflation in Commodity Prices Change in Commodity Prices Metal Percent change in a 3- Month Moving Average Ending in July Aluminum-7 Cooper-16 Nickel-34 Lead-13 Zinc-2 Steel*-21 EnergyDollars Per Brent Oil (Brl)-44 US Gas (MMBtu)-36

5. Supply Induced “Good” Deflation Price of Oil and Gas Source(s): U.S. EIA and MAPI

6. A Sudden, Rapid Appreciation of the Dollar Trade Weighted Currency Index Source(s): Federal Reserve Board

7. U.S. Foreign Trade Prices Source(s): U.S Bureau of Labor Statistics and MAPI Deflation in U.S. Foreign Trade Prices

8. Consumers Drive Growth Contribution to GDP Growth F=Forecast Source(s): U.S. Bureau of Economic Analysis and MAPI

9. Consumer Spending Growth Driven By Jobs Inflation-Adjusted Consumer Spending and Job Growth Source(s): U.S. Bureau of Economic Analysis and U.S. Bureau of Labor Statistics

10. Inventory Levels Rose In the First Quarter Source(s): U.S. Census Bureau An Inventory Correction Likely in 2015 Q2

11. Federal Reserve Senior Lending Officer Survey and Capital Investment Growth Source(s): Federal Reserve Board and Bureau of Economic Analysis and MAPI Lending Survey Signals Decelerating Investment Growth

12. 2015 H1 $BillionsPercent Change Manufacturing82.156 Food/beverage/tobacco6.68 Chemical41.9125 Plastic/rubber3.266 Nonmetallic mineral1.459 Fabricated metal0.6-29 Computer/electronic/electrical3.1-50 Transportation equipment11.6167 Other manufacturing6.1-56 Manufacturing Construction Put-in-Place, at Annual Rate Major Comment About the Slide Source(s): U.S. Census Bureau

13. GDP GrowthManufacturing Production Growth Impact of ChangeRevisionPrevious Impact of ChangeRevisionPrevious 2011-0.42.7 3.1 2012 -0.12.22.3 -1.91.5 3.4 2013 -0.71.52.2 -1.71.3 3.0 2014 0.02.4 -0.73.4 4.1 May 20150.10.4 0.3 Source(s): Bureau of Economic Analysis and the Federal Reserve Board GDP and Manufacturing Production Revisions Key Economic Statistics Revised Down

14. Manufacturing Industrial Production Source(s): Federal Reserve Board and MAPI U.S. Manufacturing Is Recovered

15. GDP Expenditure Categories Inflation-Adjusted Percent Change 20142015(F)2016(F)2017(F) Gross Domestic Product 2.42.32.92.7 Total Consumption 2.73.13.33.0 Durables 5.96.17.36.7 Nondurables 2.12.73.22.7 Services 2.42.82.72.5 Nonresidential Fixed Investment 6.23.36.85.5 Equipment 5.83.17.95.9 Information Processing Equipment 3.81.710.29.6 Industrial Equipment 7.36.113.08.5 Transportation Equipment 11.86.81.2-1.1 Intellectual Property Products 5.26.66.15.0 Structures 8.1-0.95.55.4 Residential Fixed Investment 1.88.39.58.2 Exports 3.41.74.1 Imports 3.85.96.06.8 Federal Government -2.4-0.50.00.1 State & Local Government 0.61.01.31.4 MAPI Economic Forecast F=Forecast Source(s): MAPI Foundation, August 2015

16. Economic Indicators Percent Change or Level as Specified 20142015(F)2016(F)2017(F) Prices (% change) Consumer Prices 1.60.01.72.4 Excl. Food & Energy 1.71.81.9 Producer Prices, Finished Goods 1.9-3.71.22.8 Energy ($) Imported Crude Oil ($ per barrel) $89.6$45.6$48.5$63.1 Natural Gas Henry Hub Price ($mmbtu) $4.4$2.9$3.4$3.9 Other Key Measures Nonfarm Inventory Change (Billion 2009$) $65$87$44$42 Light Vehicle Sales (Million units) 16.417.117.517.8 Housing Starts (Million units) 1.0011.1161.3151.447 Federal Surplus (NIPA, Billion $) -$632-$583-$576-$589 Current Account Balance (Billion $) -$390-$426-$383-$445 Labor Unemployment Rate (%) 6.25.45.1 Payroll Employment (% change) 1.92.11.61.5 Production (% change) Manufacturing (SIC Basis) 2.52.13.43.1 Computers & Electronic Products 2.91.56.15.9 Non-High Tech Manufacturing 2.52.33.32.9 MAPI Economic Forecast F=Forecast Source(s): MAPI Foundation, August 2015

17. Industry Inflation-Adjusted Percent Change 20142015(F)2016(F)2017(F) Manufacturing - SIC Basis2.52.13.43.1 Food1.32.42.72.1 Textile Mills-0.55.6-2.3 Textile Product Mills3.4-1.3-0.9-3.4 Apparel-2.0-0.3-2.1-3.3 Wood Products3.70.75.23.0 Furniture & Related Products6.54.26.04.0 Paper & Products-2.70.30.80.1 Printing Support Activities1.11.30.50.0 Petroleum & Coal Products1.43.03.20.8 Chemicals1.83.53.84.5 Rubber & Plastics Products7.44.93.84.5 Nonmetallic Mineral Products3.93.76.15.7 Primary Metals2.6-4.02.92.0 Fabricated Metal Products2.81.33.12.9 Machinery4.7-0.12.74.5 Computers & Electronic Products2.91.56.15.9 Elec. Eq., Appliances, & Components2.13.84.22.6 Aerospace Products & Parts-1.24.16.57.2 Motor Vehicles & Parts10.49.06.70.4 Miscellaneous5.22.53.22.9 All Less Comp., Commun., & Chips2.52.33.32.9 MAPI Manufacturing Production Forecast F=Forecast Source(s): MAPI Foundation, August 2015 Manufacturing Growth Slows Due to Strong Dollar and Less Drilling