(Tempe, AZ) — Economic growth is expected to continue in the U.S. throughout 2019, say the nation’s purchasing and supply executives in their Spring 2019 Semiannual Economic Forecast. Expectations for the remainder of 2019 continue to be positive in both the manufacturing and non-manufacturing sectors.
These projections are part of the forecast issued by the Institute for Supply Management® (ISM®) Business Survey Committees. The forecast was presented today by Timothy R. Fiore CPSM, C.P.M., chair of the ISM Manufacturing Business Survey Committee; and by Anthony S. Nieves, CPSM, C.P.M., A.P.P., CFPM, chair of the ISM Non-Manufacturing Business Survey Committee.
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. However, finding and onboarding qualified labor and being able to pass on raw material price increases will ultimately define manufacturing revenues and profitability,” says Fiore.
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.
The manufacturing panel was also asked Special Questions related to the impact thus far in 2019 on the following: (1) In the past six months, has your firm had difficulty hiring workers to fill open positions? (2) In the past six months, has your firm raised wages to recruit new hires? (3) In the past six months, has your firm offered additional training for new hires? (4) In the past 6 months, has your firm increased, decreased or left unchanged its capital spending plans for the next 12 months, and why did you say so? (5) Do you believe that tariffs have raised the price of the goods that you produce and deliver to your customers? (6) If you believe that tariffs have raised the price of your goods to your customers, by how much? (7) Do you believe that tariffs have caused delays and disruptions in your supply chain.