The manufacturing economy is forecast to keep expanding for the rest of 2022, the Institute for Supply Management said today.
The Tempe, Ariz.-based group’s forecast is based on a survey of purchasing and supply executives in 18 industries. The group performs the economic survey twice a year. ISM also produces a monthly manufacturing index by surveying executives in the same industries..
“Panelists forecast that recovery will continue the rest of the year,” Timothy R. Fiore, chair of ISM’s Manufacturing Business Survey Committee, said in a statement.
According to the institute, manufacturing revenue for 2022 is expected to increase on average by 9.2 percent. That is 2.7 percentage points higher than a December 2021 forecast of 6.5 percent.
Sixteen of the 18 industries surveyed said they anticipate revenue increases including petroleum & coal products, fabricated metal products, transportation equipment, miscellaneous manufacturing, and machinery.
Respondents also expect their companies to operate at an average of 87.2 percent of capacity. That is 1.5 percentage points lower than in December 2021.
Executives surveyed said production capacity will rise an average of 5.8 percent this year. In December, respondents projected an average increase of 6.8 percent. Fifteen industries said they anticipated capacity increases.
Those surveyed also expected a 7.4 percent boost in capital spending this year. That’s down from 7.7 percent in December. Twelve of 18 industries anticipated an increase in capital spending.
Respondents expect manufacturing employment to rise 3.2 percent for the year. Thirteen industries said they anticipate employment gains.
In recent months, ISM’s manufacturing index, known as the PMI, has indicated manufacturing is slowing but still running at relatively strong levels. Today’s forecast comes amid general economic concern over rising interest rates and inflation.
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