U.S. "recession" milder but longer: MAPI

NEW YORK (Reuters) - The U.S. "recession" will be milder but longer than usual and the factory sector will struggle to post any growth this year, according to a report issued on Tuesday by Manufacturers Alliance/MAPI.

Economic growth will slow to 1.3 percent in 2008 before improving to 1.9 percent in 2009, MAPI said in its quarterly economic forecast. The 2009 forecast is down from 2.5 percent projected in the February outlook.

U.S. gross domestic product, the broadest measure of economic activity, grew by an anemic 0.6 percent in the fourth quarter of 2007 and the first three months of this year. Growth in all of 2002 was 2.2 percent.

While recession traditionally has been defined as two consecutive quarterly contractions in GDP, the official arbiter of economic cycles in the United States is done by the National Bureau of Economic Research, a private research organization.

"The 2008 recession looks like it is going to be milder and more prolonged rather than normal," said Daniel J. Meckstroth, chief economist at Manufacturers Alliance/MAPI, a non-profit economic and policy research organization.

The 1.3 percent GDP growth forecast for this year is the same as projections made in February and November.

Meckstroth said growth would derive some support from the deep interest rate cuts made by the Federal Reserve and tax rebates being sent to millions of Americans under the government's $152 billion economic stimulus plan.

The effects of this will fade by late 2008 and early 2009.

"The outlook is for a prolonged period of subpar growth rather than a concentrated adjustment," said Meckstroth.

MAPI said manufacturing production growth will slow from an already low 1.7 percent in 2007 to 0.4 percent in 2008. A "decent upswing" of 3.1 percent will follow in 2009.

Export growth will offset some of the weakness in the manufacturing sector. MAPI said exports would rise 8.3 percent in 2008 and 9.7 percent in 2009. Imports were expected to be flat this year and increase by just 1.6 percent next year.

"The significant decline in the value of the dollar is important because it allows U.S. manufacturers to tap into the economic strength of the rest of the world to cushion our downturn," Meckstroth said.

(Reporting by Burton Frierson; Editing by Dan Grebler)