Purchasing execs expect continued economic growth

ISM’s 2012 Semiannual Economic Forecast predicts 4.5% revenue growth in manufacturing, 4.8% revenue growth in non-manufacturing in 2012

The Institute for Supply Management’s latest Semiannual Economic Forecast predicts continued strength in manufacturing and non-manufacturing sectors of the economy. Released this month, the report shows that both manufacturing and non-manufacturing executives expect about a 5% increase in revenue growth this year compared to last year. Both sectors report increasing capacity and capital expenditures, along with rising materials prices.

On the manufacturing side, supply management executives expect an average of 4.5% revenue growth this year, down slightly from what they reported in December. What’s more, executives in 16 out of 18 industries surveyed are predicting growth.

“… manufacturing continues to demonstrate its strength and resilience in the midst of global economic uncertainty and volatility,” Bradley J. Holcomb, chairman of the ISM Manufacturing Business Survey Committee said in announcing the survey results last week. “Capacityutilization 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.”

On the non-manufacturing side, purchasing and supply executives expect 4.8% revenue growth this year—much higher than the 3% growth they predicted in December.

“Non-manufacturing will continue to grow for the balance of 2012,” said Anthony S. Nieves, chairman 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.”

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