Study says U.S. economic growth to continue
Economic growth is expected to continue in the U.S. throughout the remainder of 2013, say the nation's purchasing and supply executives in their spring 2013 Semiannual Economic Forecast. The forecast offers hope for improvement in the airfreight sector. Expectations for the remainder of 2013 continue to be positive in both the manufacturing and non-manufacturing sectors. These projections are part of the forecast issued this week by the Business Survey Committee of the Institute for Supply Management (ISM).
Sixty-six percent of respondents from the panel of manufacturing supply management executives predict their revenues will be 9.9 percent greater in 2013 compared to 2012, 12 percent expect a 14.6 percent decline, and 22 percent foresee no change. This yields an overall average expectation of 4.8 percent revenue growth among manufacturers in 2013, which is a slight increase of 0.2 percentage point from December 2012 when the panel predicted a 4.6 percent increase in 2013 revenues.
With operating capacity at 80.2 percent, an expected capital expenditure increase of 9.1 percent, prices paid expected to increase a modest 0.9 percent from now through the end of 2013, and employment expected to grow only 0.9 percent for the balance of 2013, manufacturers are positioned to grow revenues while containing costs through the remainder of the year.
"With 17 out of 18 industries within the manufacturing sector predicting growth in 2013 over 2012, U.S. manufacturing continues to demonstrate its broad-based strength, efficiency and leadership in the world economy," said Bradley Holcomb, chairman of the ISM Manufacturing Business Survey Committee.
The 17 industries reporting expectations of growth in revenue for 2013 — listed in order — are: Wood Products; Furniture & Related Products; Nonmetallic Mineral Products; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Printing & Related Support Activities; Food, Beverage & Tobacco Products; Paper Products; Plastics & Rubber Products; Textile Mills; Computer & Electronic Products; Machinery; Primary Metals; Chemical Products; Apparel, Leather & Allied Products; and Fabricated Metal Products.
Fifty-six percent of non-manufacturing purchasing and supply executives expect their 2013 revenues to be greater by 7.9 percent than in 2012. Overall, respondents currently expect a 3.5 percent net increase in overall revenues, which is less than the 4.3 percent increase that was forecast in December 2012. "Non-manufacturing will continue to grow for the balance of 2013. Non-manufacturing companies continue to do more with less as evidenced by the high percentage of capacity utilization. Strategic cost management has been of paramount importance for supply managers. This is indicated by the minimal percentage increase in prices despite the volatility of various commodities. The slowing in the rate of increase for overall employment is a potential challenge.
The 15 non-manufacturing industries expecting increases in revenue in 2013 — listed in order — are: Construction; Transportation & Warehousing; Retail Trade; Professional, Scientific & Technical Services; Other Services; Accommodation & Food Services; Management of Companies & Support Services; Mining; Wholesale Trade; Finance & Insurance; Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; Public Administration; Information; and Utilities.