NEW YORK — Manufacturers expect slower economic growth this year, while non-manufatcurers expect faster growth the rest of 2012, according to purchasing and supply executives responding for the Institute for Supply Management spring Semiannual Economic Forecast.
Sixty-six percent 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 reduction of 1 percentage point from December 2011 when the panel predicted a 5.5% increase in 2012 revenues.
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. 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 J. Holcomb, chair of the ISM Manufacturing Business Survey Committee.
Fifty-five percent 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. 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,” Anthony S. Nieves, C.P.M., CFPM, chair of the ISM Non-Manufacturing Business Survey Committee said.