Economic growth in the United States is sustainable throughout the remainder of 2008, said the nation’s purchasing and supply executives in their spring 2008 Semiannual Economic Forecastissued by the Business Survey Committee of the Institute for Supply Management™ (ISM).
For the manufacturing sector, the executives predicted a modest 1% overall net nominal increase in business revenues for 2008 over 2007. This is significantly less than the 6.8% increase that was forecast in December 2007 for all of 2008, and less than the 2.4% reported for 2007. Forty-two percent of respondents said that nominal revenues (before adjusting for inflation) will increase an average of 9.2% over 2007. Conversely, 31% said their nominal revenues will decrease an average of 9.3%, and the remaining 27% indicated no change.
Manufacturing purchasing and supply managers report that their companies are currently operating at 78.6% of normal capacity, representing a decline from the 82.9% reported in December 2007 and the 82.8% reported in April 2007; and the lowest operating rate reported since December 2001, when the reported manufacturing operating rate was 77.5%.
Production capacity in manufacturing is expected to increase 2.5% in 2008. This is significantly less than the 11.3% predicted in December 2007 and the 8.3% reported in December for 2007.
Survey respondents expect a 1% increase in capital expenditures in 2008. This is slightly higher than the December 2007 forecast when members predicted only a 0.7% increase for 2008.
In the December 2007 forecast, respondents forecasted an increase of 3.3% in prices paid during the first four months of 2008; however, in the spring survey they reported prices have increased 6% for the period.