The Institute for Supply Management (ISM) has recently released its Spring 2021 Semiannual Economic Forecast. The results show bullish views towards the US economy for the rest of 2021, with forecasts slightly more optimistic than was the case in the previous forecast report last December.
Supply Chain Digest Says...
|
 |
| US manufacturers expect strong inflation this year for purchased components and materials, with predictions for a net average prices increase of 8.1% for all of 2021 |
 |
What do you say? |
| Click here to send us your comments |
|
 |
| Click here to see reader feedback |
|
Manufacturers surveyed by ISM on average expect 2021 revenues to increase 7.2%. That is a slight 0.3 percentage point higher than the result from December 2020 forecast of 6.9%, and 8.5 percentage points higher than the 1.3% decrease in revenues reported for 2020 over 2019.
A majority 59% of respondents say that revenues for 2021 will increase versus last year, on average by 13.8%.
Purchasing and supply executives taking the survey report that their companies are operating, on average, at 88.3% of normal capacity, 2.6 points higher than the figure reported in December 2020.
As a note, that estimate can be compared with capacity utilization for manufactures of just 74.1% in April, as reported in the monthly data from the US Federal Reserve Bank earlier this month,
US manufacturers also expect to modestly add to capacity in 2021, on average by 6.6%. This compares to an increase of 0.5% reported for 2020, and a December 2020 projection of an increase of 5.3% this year.
In terms capital expenditures, survey respondents said they expect an 8.7% increase in 2021, higher than the 2.4% increase for the year forecast by the panel in December 2020. 27% of respondents predict increased (on average, 46%) capital expenditures in 2021, 16% said their capital spending would decrease (on average, 23.9%), and 57% expect no change in spend in 2021.
But US manufacturers expect strong inflation this year for purchased components and materials, with predictions for a net average prices increase of 8.1% for all of 2021, compared to the end of 2020. The modest good news: with respondents reporting a prices increase of 8.3% through May, prices are projected to ease slightly over the rest of the year.
(See More Below)
|
CATEGORY SPONSOR: SOFTEON |
|
|
| |
|
|
Manufacturers forecast that manufacturing employment will increase by 2.8% by the end of 2021, compared to the end of 2020. However, based on numerous report this year on open positions in manufacturing, that increase likely would be much higher if more workers would accept available positions.
The full ISM report, which also includes forecasts from the service sector, is available here: ISM Spring 2021 Semiannual Economic Forecast
What do you think of the ISM economic forecast data? Let us know your thoughts at the Feedback section below.
|
l
