Report Predicts Manufacturing Improvement in 2024
Economic upswing should support a more robust supply chain, respondents say...
Economic improvement in the United States will continue in 2024, say the nation’s purchasing and supply management executives in the December 2023 Semiannual Economic Forecast.
Revenues are expected to increase in 15 of 18 manufacturing industries and 16 of 18 services-sector industries. Capital expenditures are expected to increase by 11.9% in the manufacturing sector (after a 14.9% increase in 2023) and increase by 2.9% in the services sector (after a 4.2% increase in 2023), the forecast predicted.
In 2024, employment is expected to grow by 2% in manufacturing and 0.8% in services. After projected growth in manufacturing and a contraction in services in the first half of the year, growth in the second half is projected to accelerate in manufacturing and strongly re-emerge in the services sector.
The projections are part of the forecast issued by the Business Survey Committees of Institute for Supply Management (ISM).
MANUFACTURING SUMMARY
Expectations for 2024 are positive, as 58% of survey respondents expect revenues to be greater in 2024 than in 2023. The panel of purchasing and supply executives expects a 5.6% net increase in overall revenues for 2024, compared to a 0.9% increase reported for 2023.
Fifteen of the 18 manufacturing industries expect revenue improvement in 2024, listed in order of largest to smallest projected increase, with Transportation Equipment landings mostly in the middle: Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; Paper Products; Furniture & Related Products; Primary Metals; Miscellaneous Manufacturing; Transportation Equipment; Chemical Products; Textile Mills; Machinery; Fabricated Metal Products; Plastics & Rubber Products; Nonmetallic Mineral Products; and Petroleum & Coal Products.
“Manufacturing’s purchasing and supply executives expect to see overall growth in 2024. They are optimistic about overall business prospects for the first half of 2024 and more excited about faster growth in the second half,” said Timothy R. Fiore, CPSM, C.P.M, chair of the ISM Manufacturing Business Survey Committee.
According to the ISM Report On Business, manufacturing grew for 28 consecutive months from June 2020 through September 2022, was unchanged in October, but dipped into contraction in November 2022, with the index remaining in contraction until now.
Respondents expect raw materials pricing pressure to ease in 2024 and see early 2024 profit margins improving over the second half of 2023.
“Wages and employment will continue to grow. Manufacturers also predict growth in both exports and imports in 2024,” says Fiore.
