Manufacturing Should Grow In 2005

Manufacturing Engineering, Feb 2005

Growth prospects for manufacturing look positive, as manufacturing executives view economic projections for 2005 with renewed optimism, according to the semiannual economic forecast from the Institute for Supply Management (ISM, Tempe, AZ).

Economic growth in the US will strengthen in 2005, say US purchasing and supply executives in their 68th Semiannual Economic Forecast, as expectations for 2005 are higher in both the manufacturing and non-manufacturing sectors, with executives in both sectors being more optimistic about the coming year than they were a year ago for 2004. "Manufacturing seemingly has reasonable momentum at this point, with continuing strength in new orders and production, and is in its 18th consecutive month of growth," says Norbert J. Ore, chair of the ISM Mfg Business Survey Committee.

In manufacturing, expectations for 2005 are high as 75% of survey respondents expect revenues to be greater in 2005 than in 2004. The panel of purchasing and supply executives expects a 7.8% net increase in overall revenues for 2005. Manufacturing respondents report operating at 83% of their normal capacity, down from 85.6% reported in April 2004. Manufacturers expect that employment will grow by 1.6%, while labor and benefits costs are expected to increase an average of 3.4%. Manufacturing purchasers are predicting growth in exports and imports. They also expect the US dollar to strengthen somewhat against currencies of major trading partners.

For more information, see http://ism.ws/ISMReport/Semiannual ROB122004.cfm.