Manufacturing Leaders Forecast Economic Growth
Economic growth is expected to continue in the U.S. throughout the rest of this year, according to the nation’s purchasing and supply executives in their Spring 2019 Semiannual Economic Forecast. Expectations for the remainder of the year continue to be positive in the manufacturing sector.
These projections are part of the forecast issued by the Institute for Supply Management (ISM) Business Survey Committees.
Fifty-five percent of respondents from the panel of manufacturing supply management executives predict their revenues, on average, will be 4 percent greater in 2019 compared to 2018, 11 percent expect an 11.1 percent decline, and 34 percent foresee no change in revenue. This yields an overall average forecast of 4 percent revenue growth among manufacturers for 2019. This current prediction is 1.7 percentage points below the December 2018 forecast of 5.7-percent revenue growth for 2019 and is 1.8 percentage points below the actual revenue growth reported for all of 2018.
With operating rate at 84.2 percent, an expected capital expenditure increase of 5.9 percent, an increase of 1.5 percent for prices paid for raw materials, and employment expected to increase by 2 percent by the end of 2019, manufacturing is positioned to grow revenues while managing costs through the remainder of the year.
“With 17 of the 18 manufacturing sector industries predicting revenue growth in 2019, U.S. manufacturing continues to move in a positive direction,” said Timothy R. Fiore CPSM, C.P.M., chair of the ISM Manufacturing Business Survey Committee. “However, finding and onboarding qualified labor and being able to pass on raw material price increases will ultimately define manufacturing revenues and profitability.”
The 17 industries reporting expectations of growth in revenue for 2019 (listed in order) are: Apparel, leather & allied products; electrical equipment, appliances & components; computer & electronic products; nonmetallic mineral products; textile mills; miscellaneous manufacturing; furniture & related products; petroleum & coal products; primary metals; food, beverage & tobacco products; wood products; chemical products; transportation equipment; machinery; fabricated metal products; plastics & rubber products; and paper products.