“At present the sector is in the midst of recovery as manufacturing is in its fifth consecutive month of growth,” said Norbert Ore, chair of the ISM Manufacturing Business Survey Committee, upon release of the ISM forecast in early December. Manufacturing economic activity grew in December for the sixth consecutive month and reached its highest level since December 1983.
Survey respondents reported operating at 80.1% of normal capacity, up slightly from 79% reported in May 2003. Purchasing and supply executives predict that capital expenditures will increase 3.2% in 2004, compared to the 2.7% increase reported last year.
Manufacturers expect that employment will grow by a modest 0.3% this year, while labor and benefits costs are expected to rise an average of 2.7%. They anticipate growth in exports and imports, with exports growing at a slightly lower rate compared with imports. They also expect the U.S. dollar to maintain its current positive position against currencies of major trading partners.
They predict the prices they pay will increase 1% during the first four months of 2004, and will increase an additional 0.3% for the balance of the year, resulting in only a moderate change in prices during the upcoming year.
In response to a targeted question, 84% of respondents said they are less than three-quarters complete in their goals of achieving efficiency from the application of technology to supply management.