U.S. manufacturing growth continues in 2018, revenue to increase 6.6%
Economic growth is expected to continue in the U.S. throughout 2018, according to the Institute for Supply Management’s Spring 2018 Semiannual Economic Forecast. Expectations for the remainder of 2018 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.
Sixty-two per cent of respondents from the panel of manufacturing supply management executives predict their revenues, on average, will be 11.6 per cent greater in 2018 compared to 2017, 5 per cent expect a 11.9 per cent decline, and 33 per cent foresee no change in revenue. This yields an overall average forecast of 6.6 per cent revenue growth among manufacturers for 2018. This current prediction is 1.5 percentage points above the December 2017 forecast of 5.1-per cent revenue growth for 2018 and is 2.5 percentage points above the actual revenue growth reported for all of 2017. With operating rate at 85.8 percent, an expected capital expenditure increase of 10.1 percent, an increase of 5 percent for prices paid for raw materials, and employment expected to increase by 1.8 per cent by the end of 2018 compared to the end of 2017, manufacturing is positioned to grow revenues while managing costs through the remainder of the year. “With 15 of the 18 manufacturing sector industries predicting revenue growth in 2018, when compared to 2017, U.S. manufacturing continues to move in a positive direction. However, finding and onboarding qualified labour and being able to pass on raw material price increases will ultimately define manufacturing revenues and profitability,” says Fiore.
The 15 industries reporting expectations of growth in revenue for 2018 — listed in order — are: Miscellaneous Manufacturing; Fabricated Metal Products; Transportation Equipment; Plastics & Rubber Products; Petroleum & Coal Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Wood Products; Primary Metals; Machinery; Chemical Products; Paper Products; Furniture & Related Products; Food, Beverage & Tobacco Products; and Nonmetallic Mineral Products.
The manufacturing panel was also asked Special Questions related to the impact thus far in 2018 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 six 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 will raise the price of the goods that you produce and deliver to your customers? (6) If you believe that tariffs will raise the price of your goods to your customers, by how much? (7) Do you believe that tariffs will cause delays and disruptions in your supply chain? Their responses are provided at the end of the report.
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