TEMPE, Ariz.—The U.S. economy should continue to grow in 2015 in both the manufacturing and non-manufacturing sectors, according to the Institute of Supply Management's (ISM) latest semiannual economic forecast, which is based on input from the nation's purchasing and supply management executives.
In the manufacturing sector, two-thirds of executives surveyed said they expect revenues to rise in 2015, according to the December ISM Report on Business. Collectively this translates to a 5.6-percent net increase in revenues, compared with a 3.6-percent increase reported a year ago for 2014 over 2013.
The projections are part of the forecast issued by the ISM's business survey committee; the forecast was released by Bradley Holcomb and Anthony Nieves, chairmen of the manufacturing and non-manufacturing business survey committees, respectively.
Among the 15 manufacturing industries expecting revenue improvement are the plastics and rubber products, transportation equipment and chemical products sectors, the ISM said.
Manufacturing experienced 18 consecutive months of growth from June 2013 through November 2014, Mr. Holcomb said, “and our forecast calls for a continuation of growth in 2015, building on the momentum reported in 2014.”
Respondents said they expect raw materials pricing pressures in 2015 to be low, similar to levels experienced in 2014, and expect their margins will improve in 2015, he said. Manufacturers are expecting growth in exports and imports in 2015 over 2014.
Optimism among non-manufacturing supply management executives is slightly lower—62 vs. 67 percent—than in the manufacturing sector, but collectively they expect a higher net increase in revenue, 10 percent. This is nearly double their expectation a year ago for 2014 over 2013.
Among the 15 non-manufacturing industries expecting revenue improvement are: wholesale and retail trades, construction, mining and transportation/warehousing.
In the manufacturing sector, respondents predicted that capital expenditures will increase by 3.7 percent this year, down measurably from a 14.7-percent increase reported in 2014 over 2013, and that employment will increase by 1.5 percent in 2015, while labor and benefit costs are expected to increase an average of 3.2 percent.
Respondents also expect the U.S. dollar to strengthen against all seven currencies of major trading partners in 2015.