ISM: Economy to Improve in 2024

The Institute for Supply Management (ISM) predicts economic improvement for the United States in 2024, according to its December 2023 Semiannual Economic Forecast. The Tempe, Ariz.-based organization’s latest report is based on a nationwide survey of manufacturing and services supply executives taken in November.

“Manufacturing’s purchasing and supply executives expect to see overall growth in 2024. They are optimistic about overall business prospects for the first half of 2024 and more excited about faster growth in the second half,” says Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee.

Revenues are expected to increase in 15 of 18 manufacturing industries and in 16 of 18 services-sector industries. ISM’s panel of purchasing and supply executives forecast a 5.6% net increase in overall revenues for 2024, compared with a 0.9% increase reported for 2023.

Manufacturing survey respondents report their companies are operating at 83% of normal capacity, up one percentage point from the 82% reported in May 2023, according to ISM. Purchasing and supply executives predict that capital expenditures will increase year over year by 11.9% in 2024, compared to the reported 14.9% increase from 2022 to 2023. Manufacturers expect employment to grow by 2% in 2024 relative to current levels, while labor and benefit costs are expected to increase an average of 5.2%. The three industries projected to outpace the average: Plastics & Rubber Products; Transportation Equipment; and Primary Metals.

ISM predicts that prices paid for raw materials will increase 3.2% during the first five months of the year, with an overall increase of 3.3% for 2024. This compares to a reported 4.1% increase in raw materials prices in 2023.

ISM’s full report is available here.