The nation’s purchasing and supply executives predict that the U.S. economy will continue to grow slowly for the remainder of 2023 in their Spring 2023 Semiannual Economic Forecast. Despite ongoing inflation and geopolitical uncertainties, expectations for the rest of 2023 are similar to those stated in December 2022.
The Institute for Supply Management® (ISM®) Business Survey Committees released a forecast that includes these projections. The ISM Manufacturing Business Survey Committee’s chair, Timothy R. Fiore, CPSM, C.P.M., and the ISM Services Business Survey Committee’s chair, Anthony S. Nieves, CPSM, C.P.M., A.P.P., CFPM, presented the forecast today.
industrial summary
On average, a 1.7 percent growth in revenue is anticipated for 2023. 3.8 percentage points less than what was anticipated in December 2022 5.5 percent, which is 7.6 percentage points less than the projected 9.3 percent annual growth for 2022. According to 40% of respondents, revenue growth from 2022 to 2023 will be 11.6 percent on average. Twenty percent see a drop in revenues (14.6 percent on average), while forty percent predict no change. The manufacturing sector is continuing its recovery from the turmoil that started in 2020 and is anticipated to last through this year, with an operating rate of 82 percent and projected increases in capital expenditures (0.4 percent), prices paid for raw materials (2.3 percent), and employment (0.5 percent) by the end of 2023. “The panellists anticipate that the recovery will continue as 10 manufacturing sector industries anticipate revenue growth in 2023 and 11 industries anticipate employment growth in 2023. Despite being a little weaker than anticipated, the remainder of the year. According to Fibre, “Sentiment in each sector was broadly in line with industry performance reports in the April 2023 Manufacturing ISM® Report On Business® and the December-conducted fall semiannual economic forecast.
As follows: Primary Metals; Printing & Related Support Activities; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Transportation Equipment; Machinery; Textile Mills; Miscellaneous Manufacturing; and Petroleum & Coal Products. Ten out of 18 industries report anticipated revenue increases for the remainder of 2023.
Services Synopsis
In contrast to the 3.1 percent increase predicted in December 2022, respondents predict a 2.7 percent net gain in overall revenues. 38 percent of respondents predict higher revenues in 2023, based on 10.2 percent on average compared to 2022. While 51 percent predict no change, 11 percent anticipate a drop in revenue (down 11.1% on average). The rest of 2023 will see more growth in the services sector. Service providers are currently working at 91% of their typical capacity. According to supply managers, prices will rise by 4.3 percent over the course of the year, reflecting rising inflation. The employment rate is anticipated to rise by 0.7%. According to Nieves, only 14 industries now anticipate rising income, down from the 14 that did so in December 2022.
Arts, entertainment & recreation, retail trade, professional, scientific & technical services, other services, agriculture, forestry, fishing & hunting, information, transportation & warehousing, management of companies & support services, public are the 14 of the 18 industries that anticipate revenue growth in 2023. Administration, money and insurance, lodging and dining, real estate, rental and leasing, instruction, and health and social assistance.
OSCILLATION RATE
Executives in charge of purchasing and supply state that, on average, their businesses are working at 82 percent of their potential, which is 6.4 percentage points less than the estimate from December 2022. Petroleum & Coal Products, Paper Products, Apparel, Leather & Allied Products, Wood Products, Machinery, Computer & Electronic Products, Primary Metals, Chemical Products, Transportation Equipment, Miscellaneous Manufacturing, and Electrical Equipment, Appliances & Components are the 11 industries reporting operating capacity levels above the average rate of 82 percent.
According to Business Survey Committee respondents, services organisations are generally functioning at 91 percent of their typical capacity. In comparison to December 2022, this is 1.1 percentage points greater. The 10 Real Estate, Rental & Leasing, Other Services, Educational Services, Arts, Entertainment & Recreation, Utilities, Finance & Insurance, Management of Companies & Support Services, Agriculture, Forestry, Fishing & Hunting, Public Administration, and Information are examples of normal industries that operate at capacity levels above the average rate of 91 percent.Production capacity is anticipated to rise by 0.4 percentage points in 2023; in December, panellists predicted a rise of 5.3 percent this year and 6.7 percent for 2022. 26 percent of respondents anticipate an average 12.3 percent gain in capacity, 14 percent anticipate average 18.7 percent decreases, and 60 percent anticipate no change. Apparel, Leather & Allied Products; Fabricated Metal Products; Miscellaneous Manufacturing; Food, Beverage are among the 10 industries anticipating improvements in production capacity for 2023. & Tobacco Products, Machinery, Plastics & Rubber Products, Primary Metals, Paper Products, Electrical Equipment, Appliances & Components, and Transportation Equipment.
