ISM: Manufacturing Growth to Continue in 2016
By Bill Koenig
Manufacturing growth will continue this year, with small increases in revenue and capital spending, the Institute for Supply Management said today.
The Tempe, AZ-based group issued a forecast based on a survey of purchasing executives. The forecast is in addition to the institute’s monthly report about the manufacturing economy.
REVENUE: The average expected 2016 revenue growth for respondents is 2.8%. That’s down from a December forecast of 4.1% growth but double the 1.4% actual increase in 2015.
Fourteen of 18 manufacturing sectors expect increases, according to the institute. They include fabricated metal products, furniture, miscellaneous manufacturing, transportation equipment, primary metals and wood products.
“US manufacturing continues to move in a positive direction,” Bradley J. Holcomb, chair of the group’s business survey committee, said in an e-mailed statement.
OPERATING RATE: Purchasing and supply managers said their companies currently are operating at an average of 81.7% of capacity, up from 81.6% in December and 79.5% in April 2015. Eleven industries reported operating at or above the 81.7% average included miscellaneous manufacturing, wood products and chemical products.
PRODUCTION CAPACITY: Respondents forecast an average of a 3% increase in production capacity this year, higher than the 2.8% predicted in December, according to ISM.
Sixteen industries expect increased capacity including primary metals, fabricated metal products, transportation equipment and machinery.
CAPITAL SPENDING: Respondents forecast an average 1% in capital spending this year, the same figure as a December forecast. Nine industries expecting capital spending increases include furniture, textiles and miscellaneous manufacturing.
EMPLOYMENT: The average forecast of respondents was for employment to remain at current levels during 2016
Published Date : 5/18/2016