Both the manufacturing and non-manufacturing sectors of the economy should see growth in 2016, according to the Institute for Supply Management's December 2015 Semiannual Economic Forecast, released Tuesday.
On the manufacturing side, 63% of the purchasing and supply management executives responding expect revenues to grow by an average of 4.1% next year, compared to a 1.4% in 2015. Similarly, 60% of non-manufacturing respondents expect revenue growth averaging 3.2%, compared to 2.7% this year.
Manufacturing "respondents expect raw materials pricing pressures in 2016 to be very low, and expect their profit margins will improve," according to the survey. "The panel predicts the prices paid for raw materials will increase by 0.1% during the first four months of 2016, and will increase an additional 0.4% during the balance of the year, with an overall increase of 0.5% for 2016. This compares to a reported 2.6% decrease in raw materials prices for 2015 compared with 2014," the survey said.
In non-manufacturing, respondents see "prices they pay for materials and services" rising 1.5% next year, and overall labor and benefit costs growing 2.3%.
"Manufacturing purchasing and supply executives expect to see growth in 2016. They are optimistic about their overall business prospects for the first half of 2016, and are more optimistic about the second half of 2016," said Bradley J. Holcomb, chair of the ISM Manufacturing Business Survey Committee.
Non-manufacturing supply managers "are optimistic about continued growth in the first half of 2016 compared to the second half of 2015," said Anthony S. Nieves, chair of the ISM Non-Manufacturing Business Survey Committee.
