The manufacturing economy will continue to expand this year but at a slower pace than previously forecast, the Institute for Supply Management said today.
The Tempe, Ariz.-based group said manufacturing revenue will increase by 1.7% this year. That’s down from a December forecast for a boost of 5.5%.
ISM produces a monthly manufacturing index, known as the PMI. That’s based on a survey of purchasing and supply executives in 18 industries. The same group was surveyed for the economic forecast.
Ten of the 18 industries said they expected revenue gains for 2023. They included primary metals, transportation equipment, and machinery.
Purchasing and supply executives said their companies are operating at 82% of capacity. That was down 6.4 percentage points from a forecast in December. Eleven industries reported operating above the 82% level.
Manufacturing respondents said they expect a gain of 0.4% in capital expenditures this year, down from a December forecast of an increase of 5.3%. Eight industries expect an increase in capital expenditures, including petroleum & coal products.
ISM’s monthly manufacturing index is considered a leading economic indicator and a barometer of where manufacturing is heading. That index has indicated economic contraction for six straight months.
The Federal Reserve Board has increased interest rates 10 times in little more than a year. The Fed wants to slow the economy to combat inflation.
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