May 09, 2012
Economic growth is expected to continue in the United States throughout the remainder of 2012, say the nation's purchasing and supply executives in their spring 2012 Semiannual Economic Forecast. Expectations for the remainder of 2012 continue to be positive in both the manufacturing and non-manufacturing sectors.These projections are part of the forecast issued by the Business Survey Committee of the Institute for Supply Management.Manufacturing SummaryAlmost two-thirds (66%) of respondents from the panel of manufacturing supply management executives predict revenues will be 9.5% greater in 2012 compared to 2011, 15% expect a 12.1% decline, and 19% foresee no change. This yields an overall average expectation of 4.5% revenue growth among manufacturers in 2012, which is a modest reduction of 1 percentage point from December 2011 when the panel predicted a 5.5% increase in 2012 revenues. Manufacturing is an important economic indicator for truck freight.With operating capacity at 81.6%, an expected capital expenditure increase of 6.2% and prices paid expected to increase a modest 0.4% from now through the end of 2012, manufacturers are positioned to grow revenues and contain costs through the remainder of the year. "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," says Bradley J. Holcomb, chair of the ISM Manufacturing Business Survey Committee. "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."The 16 industries reporting expectations of growth in revenue for 2012 - listed in order - are:- apparel, leather & allied products; - machinery- primary metals- petroleum & coal products- plastics & rubber products - furniture & related products - electrical equipment, appliances & components - nonmetallic mineral products- transportation equipment- printing & related support activities- textile mills- miscellaneous manufacturing - food, beverage & tobacco products - chemical products- paper products - fabricated metal productsNon-ManufacturingMore than 50% of non-manufacturing purchasing and supply executives expect their 2012 revenues to be greater by 9.9% than in 2011. Overall, respondents currently expect a 4.8% net increase in overall revenues, which is greater than the 3.1% increase that was forecast in December 2011. "Non-manufacturing will continue to grow for the balance of 2012," says Anthony S. Nieves, chair of the ISM Non-Manufacturing Business Survey Committee. "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."For the full report, go to www.ism.ws.