Forecast Predicts Continued Economic Growth Through 2012
Indicators in both the manufacturing and non-manufacturing sectors have led to predictions of continued economic growth by the nation’s purchasing and supply executives. Predictions were gathered in the first of this year’s Semiannual Economic Forecast reports issued by the Business Survey Committee of the Institute for Supply Management (ISM).
Regarding the manufacturing sector, 66 percent of participating executives expect revenues to be 9.5 percent higher over 2011, 15 percent predict a 12.1 percent decline, and 19 percent anticipate no revenue change. The average overall expectation of revenue growth among manufacturers was 4.5 percent. The survey showed high hopes that the manufacturing sector can grow revenues while containing costs for the rest of 2012 with an operating capacity at 81.6 percent, a 6.2 percent increase in capital expenditures over 2011, and only a modest increase of 0.4 percent to prices paid.
“With 16 out of 18 industries within the manufacturing sector predicting growth in 2012 over 2011, manufacturing continues to demonstrate its strength and resilience in the midst of global economic uncertainty and volatility. Capacity utilization is at historically typical levels and manufacturers are continuing to invest in their businesses. The positive forecast for revenue growth and modest price increases will drive a continuation of the recovery in the manufacturing sector,” said Bradley Holcomb, co-chair of the ISM Survey Committee (manufacturing).
For the non-manufacturing sector, 55 percent of executives expect a 9.9 percent increase in revenues over 2011 and an overall 4.8 percent net increase in revenues. Increases in revenue are expected in 17 non-manufacturing industries such as information, mining, finance & insurance, and agriculture. “Non-manufacturing will continue to grow for the balance of 2012. Non-manufacturing companies reflect strong capacity utilization coupled with forecasted revenue growth. This indicates that non-manufacturing companies are streamlined and efficient. Overall costs have been contained despite strong increases for fuel and petroleum-based products. Slow employment growth continues to be a challenge for the non-manufacturing sector,” said Anthony Nieves, co-chair of the ISM Survey Committee (non-manufacturing).