Economic expansion in manufacturing will last for the rest of this year, the Institute of Supply Management said in a forecast issued today.
Revenue in manufacturing is expected to rise by an average of 7.2 percent this year, the Tempe, Ariz.-based group said. That’s higher than a December forecast that called for a 6.9 percent gain.
The forecast is based on a survey of purchase and supply executives in 18 industries. This is the same group of executives who are surveyed by ISM as part of its monthly manufacturing index.
That index, known as the PMI, has been running at high levels in recent months. The PMI was 60.7 percent in April, down from a red-hot 64.7 percent in March. A PMI above 50 percent indicates economic expansion.
For the economic forecast, representatives from all 18 industries said they expect revenue increases this year.
The ISM survey of manufacturers this month indicated factories were operating at an average of 88.3 percent, up from 85.7 percent in December and 75.9 percent in May 2020.
The COVID-19 pandemic began to slam manufacturing in March 2020. Temporary plant shutdowns took place while new safety procedures were implemented. Factories reopened beginning in May 2020.
The forecast issued today also calls for capital expenditures in manufacturing to increase by an average of 8.7 percent this year.
Manufacturing’s recovery from COVID-19 has varied by industry. The automotive industry has bounced back sooner than others, although the sector has been affected by a global shortage of microchips. Aerospace’s recovery has been slower because the pandemic has reduced the demand for air travel.