Economic growth is expected to continue in the United States throughout the remainder of 2011, say the nation's purchasing and supply executives in their spring 2011 Semiannual Economic Forecast. Growth expectations for the remainder of 2011 have improved in both the manufacturing and non-manufacturing sectors.
These projections are part of the forecast issued by the Business Survey Committee of the Institute for Supply Management (ISM). The ISM is the largest supply management association in the world, with more than 34,000 supply management professionals as members in a network of domestic and international affiliated associations, including many who work in the healthcare industry.
Healthcare supply chain executives are particularly interested in these growth projections as some sectors directly impact prices of bulk supplies used by health systesms.
Sixty-eight percent of ISM survey respondents predict revenues will be 13.2 percent greater, 12 percent expect a 13.2 percent decline, and 20 percent foresee no change. This yields significant expectations for growth in 2011, as manufacturers’ net revenues are expected to increase 7.5 percent. This represents an improvement in expectations from December 2010 when the panel of supply management executives predicted a 5.6 percent increase in 2011 revenues compared to 2010.
With operating capacity improving to 83.2 percent, an expected capital expenditure increase of 17.9 percent, and prices paid expected to increase 7.4 percent for the full year of 2011, manufacturers will be challenged to grow revenues and contain costs through the remainder of the year.
“Much of manufacturing has emerged from the economic downturn and is experiencing significant growth. Capacity utilization is back to typical levels and manufacturers are significantly investing in their businesses. The positive forecast for revenue growth and improved employment will drive the continuation of the recovery in the sector,” said Norbert Ore, chair of the ISM Manufacturing Business Survey Committee.
The 17 industries reporting expectations of growth in revenue during the year — listed in order — are: plastics and rubber products; fabricated metal products; primary metals; apparel, leather and allied products; machinery; computer and electronic products; transportation equipment; food, beverage and tobacco products; nonmetallic mineral products; printing and related support activities; wood products; chemical products; miscellaneous manufacturing; textile mills; electrical equipment, appliances and components; furniture and related products; and paper products.
Key points of the report include:
- Operating rate is currently 83.2 percent of normal capacity.
- Production capacity is expected to increase 8.1 percent in 2011.
- Capital expenditures are expected to increase 17.9 percent in 2011.
- Prices paid increased 6.1 percent through the end of April 2011.
- Prices are expected to increase a total of 7.4 percent for all of 2011, indicating an expected increase in prices of 1.3 percent for the remainder of the year.
- Manufacturing employment is expected to increase 2.9 percent during the remainder of 2011.
- Manufacturing revenues are expected to increase 7.5 percent in 2011.
Overall, manufacturing is expected to grow significantly in 2011, Ore said, while non-manufacturing is expected to continue growing slowly in 2011.
In the non-manufacturing sector, 50 percent of purchasing and supply executives expect their 2011 revenues to be greater by 9.3 percent than in 2010. Overall, respondents currently expect a 2.1 percent net increase in overall revenues, which is lower than the 3.4 percent increase that was forecast in December 2010.
The 13 non-manufacturing industries expecting increases in revenue in 2011 — listed in order — are: agriculture, forestry, fishing and hunting; retail trade; wholesale trade; arts, entertainment and recreation; mining; real estate, rental and leasing; information; other services; finance and insurance; accommodation and food services; management of companies and support services; transportation and warehousing; and construction.
Key points in the report include:
- Operating rate is currently 83.7 percent of normal capacity.
- Production capacity is expected to increase 2 percent in 2011.
- Capital expenditures are expected to increase 1.4 percent in 2011.
- Prices paid increased 4.1 percent through the end of April 2011.
- Prices are expected to increase an additional 0.6 percent over the remainder of the year, for a total 2011 increase of 4.7 percent.
- Non-manufacturing employment is expected to increase 0.9 percent during the balance of 2011.
- Non-manufacturing revenues are expected to increase 2.1 percent in 2011.