US economy to continue to softly expand for rest of 2024: ISM survey

Expectations for the remainder of 2024 are similar to those expressed in December 2023, despite continued inflation concerns and geopolitical uncertainty.

These projections are part of the forecast issued by the Institute for Supply Management® (ISM®). The forecast was presented today by Timothy R. Fiore, chair of the ISM manufacturing business survey committee.

US manufacturing revenue is expected to increase this year by 2.1 per cent on an average—3.5 percentage points (pps) lower than the December 2023 forecast of 5.6 per cent, and 1.2 pps higher than the 0.9-pp year-on-year (YoY) increase reported last year.

Forty-four per cent of respondents said manufacturing revenues will increase this year by 8.6 per cent on an average compared to last year. Fourteen per cent said revenues will decrease by 12.3 per cent on an average, and 42 per cent indicated no change.

With an operating rate of 82.8 per cent and projected increases in capital expenditures (1 per cent), prices paid for raw materials (1.9 per cent) and employment (0.3 per cent) by the end of 2024, the manufacturing sector continues its comeback from the turmoil that began in 2020, an ISM release said.

The 12 of 18 industries that reported projected revenue increases for the rest of this year include apparel; leather and allied products; chemical products; textile mills; and furniture and related products.

Purchasing and supply executives reported that their companies are operating, on an average, at 82.8 per cent of normal capacity—0.2 pp lower than the figure reported in December 2023.

Among the 10 industries reporting operating capacity levels above the average rate of 82.8 per cent are textile mills.

Manufacturing production capacity is expected to increase by 2.4 per cent in 2024; in December, panellists reported an increase of 0.7 pp for 2023 and projected an increase of 7.8 per cent this year.

Thirty per cent of respondents expect capacity increases of, on an average, 12.6 per cent; 7 per cent expect decreases of 19.7 per cent on an average; and 62 per cent expect no change.

Survey respondents expect a 1-per cent increase in capital expenditures in manufacturing in 2024, much lower than the 11.9 per cent increase forecast by the panel in December.

In the December forecast, respondents predicted an increase of 3.2 per cent in prices paid during the first four months of 2024; they now report prices increased by 1.6 per cent. The 45 per cent who say their prices are higher now than at the end of 2023 report an average increase of 5.8 per cent, while 17 per cent reported lower prices, by 6 per cent on an average. The remaining 39 per cent indicated no change for the period.

Among the 17 US manufacturing industries that reported an increase in prices paid for the first part of 2024 are textile mills; printing and related support activities; apparel, leather and allied products; and furniture and related products.

Increased revenues are expected this year, as purchasing and supply management executives predict an overall net increase of 2.1 per cent compared to 2023—3.5 pps lower than the 5.6-per cent increase forecast in December, and 1.2 pps higher than the 0.9-pp YoY rise reported for 2023.

Forty-four per cent of respondents say that revenues for 2024 will increase, on an average, by 8.6 per cent; 14 per cent say their revenues will decrease by 12.3 per cent on an average; and 42 per cent forecast no change.

The 12 manufacturing industries expecting increases in revenue this year include apparel, leather and allied products; chemical products; textile mills; and furniture and related products.

Fibre2Fashion News Desk (DS)