ISM® Reports Economic Growth To Continue In 2018

11/12/2017 08:00

Source: PR News

ISM® Reports Economic Growth To Continue In 2018

Manufacturing Growth Expected in 2018

Revenue to Increase 5.1%

Capital Expenditures to Increase 2.7%

Capacity Utilization Currently at 85.8%

Non-Manufacturing Growth Projected in 2018

Revenue to Increase 6%

Capital Expenditures to Increase 3.8%

Capacity Utilization Currently at 91.9%

TEMPE, Ariz., Dec. 11, 2017 /PRNewswire/ -- Economic growth in the United States will continue in 2018, say the nation's purchasing and supply management executives in the December 2017 Semiannual Economic Forecast. Expectations are for a continuation of the economic recovery that began in mid-2009, as indicated in the monthly ISM® Report On Business®. The manufacturing sector is optimistic about growth in 2018, with revenues expected to increase in 16 manufacturing industries, and the non-manufacturing sector indicates that 17 of its industries will see higher revenues. Capital expenditures, a major driver in the U.S. economy, are expected to increase by 2.7 percent in the manufacturing sector and increase by 3.8 percent in the non-manufacturing sector. Manufacturing expects that its employment base will grow by 1.2 percent, while non-manufacturing expects employment growth of 1.5 percent.

These projections are part of the forecast issued by the Business Survey Committee of Institute for Supply Management® (ISM®). The forecast was released today by Timothy R. Fiore, CPSM, C.P.M, chair of the ISM Manufacturing Business Survey Committee, and by Anthony S. Nieves, CPSM, C.P.M., A.P.P, CFPM, chair of the ISM Non-Manufacturing Business Survey Committee.

Manufacturing Summary

Expectations for 2018 are positive, as 70 percent of survey respondents expect revenues to be greater in 2018 than in 2017. The panel of purchasing and supply executives expects a 5.1 percent net increase in overall revenues for 2018, compared to a 4.6 percent increase predicted for 2017 over 2016 revenues. The 16 manufacturing industries expecting revenue improvement in 2018 over 2017 — listed in order — are: Fabricated Metal Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Machinery; Miscellaneous Manufacturing; Computer & Electronic Products; Transportation Equipment; Plastics & Rubber Products; Primary Metals; Paper Products; Textile Mills; Chemical Products; Food, Beverage & Tobacco Products; Furniture & Related Products; Printing & Related Support Activities; and Petroleum & Coal Products.

"Manufacturing purchasing and supply executives expect to see growth in 2018. They are optimistic about their overall business prospects for the first half of 2018, with business continuing to expand through the second half of 2018," says Fiore. "In 2017, manufacturing experienced 11 straight months of growth from January through November, resulting in an average PMI® of 57.4, compared to 51.5 for 2016, as reported in the monthly Manufacturing ISM Report On Business®. Respondents expect raw materials pricing pressures in 2018 to increase, and expect their profit margins will improve in 2018 over 2017. Manufacturers are also predicting growth in both exports and imports in 2018."

In the manufacturing sector, respondents report operating at 85.8 percent of their normal capacity, up 3.3 percentage points from the 82.5 percent reported in May 2017. Purchasing and supply executives predict that capital expenditures will increase by 2.7 percent in 2018 over 2017, compared to the 8.7 percent increase reported for 2017 over 2016. Manufacturers have an expectation that employment in the sector will grow by 2.3 percent in 2017 relative to December 2016 levels, while labor and benefit costs are expected to increase an average of 2.1 percent in 2018. Respondents also expect the U.S. dollar to strengthen against all seven currencies of major trading partners in 2018, as was the case in 2017.

The panel predicts the prices paid for raw materials will increase by 1.3 percent during the first four months of 2018, and will increase an additional 0.5 percent during the balance of the year, with an overall increase of 1.8 percent for 2018. This compares to a reported 2.1 percent increase in raw materials prices for 2017 compared with 2016.

Four special questions were asked of our panel.

1. The first special question asked about the difficulty hiring workers to fill open positions in the past six months. The responses from our manufacturing panel, with percentages of the total number of responses noted, were "Yes" (64.7%), "No" (33.8%), and "Not applicable (no open positions)" (1.4%).

2. The second special question asked if the firm had raised wages to recruit new hires. The responses from our manufacturing panel, with percentages of the total number of responses noted, were "Yes" (44.4%), "No" (53.1%), and "Not applicable" (2.4%).

3. The third special question asked if the firm had offered additional training to new hires. The responses from our manufacturing panel, with percentages of the total number of responses noted, were "Yes" (44.4%), "No" (50.2%), and "Not applicable" (5.4%).

4a. The fourth special question asked whether the firm has increased, decreased or left unchanged its capital spending plans for the next 12 months. The responses from our manufacturing panel, with percentages of the total number of responses noted, were "Increased capital spending plans" (39.9%), "Decreased capital spending plans" (16.3%), and "No change to capital spending plans" (43.8%).

4b. When asked "why" in response to the previous question; 66 percent of respondents reported "General Business Outlook", (5.8%) of respondents reported "Prospects for Business Tax Reform", (2.9%) reported "Prospects for Regulatory Reform", (13.6%) reported "Other" and (11.7%) reported "Not Applicable".

Non-Manufacturing Summary

Fifty-nine percent of non-manufacturing supply management executives expect their 2018 revenues to be greater than in 2017. They currently expect a 6 percent net increase in overall revenues for 2018 compared to a 5.7 percent increase reported for 2017 over 2016 revenues. The 17 non-manufacturing industries expecting revenue improvement in 2018 over 2017 — listed in order — are: Information; Professional, Scientific & Technical Services; Construction; Agriculture, Forestry, Fishing & Hunting; Management of Companies & Support Services; Retail Trade; Real Estate, Rental & Leasing; Transportation & Warehousing; Wholesale Trade; Other Services; Health Care & Social Assistance; Arts, Entertainment & Recreation; Finance & Insurance; Educational Services; Accommodation & Food Services; Public Administration; and Mining.

"Non-manufacturing supply managers report operating at 91.9 percent of their normal capacity, higher than the 86.9 percent reported in May 2017. They are optimistic about continued growth in the first half of 2018 compared to the second half of 2017, even though there is a projected decrease in growth rate for capital reinvestment," says Nieves. "They forecast that their capacity to produce products and provide services will rise by 3.4 percent during 2018, and capital expenditures will increase by 3.8 percent from 2017 levels. Non-manufacturers also predict their employment will increase by 1.5 percent during 2018."

Respondents in non-manufacturing industries expect the prices they pay for materials and services will increase by 2.2 percent during 2018. They also forecast their overall labor and benefit costs will increase 2.6 percent in 2018. Profit margins are reported to have decreased in the second and third quarters of 2017, and respondents expect them to increase between now and May 2018.

The same four special questions were asked of our non-manufacturing panel.

1. The first special question asked about the difficulty hiring workers to fill open positions in the past six months. The responses from our non-manufacturing panel, with percentages of the total number of responses noted, were "Yes" (61.1%), "No" (32.9%), and "Not applicable (no open positions)" (6.0%).

2. The second special question asked if the firm had raised wages to recruit new hires. The responses from our non-manufacturing panel, with percentages of the total number of responses noted, were "Yes" (37.3%), "No" (57.2%), and "Not applicable" (5.4%).

3. The third special question asked if the firm had offered additional training to new hires. The responses from our non-manufacturing panel, with percentages of the total number of responses noted, were "Yes" (52.1%), "No" (40.7%), and "Not applicable" (7.2%).

4a. The fourth special question asked whether the firm has increased, decreased or left unchanged its capital spending plans for the next 12 months. The responses from our non-manufacturing panel, with percentages of the total number of responses noted, were "Increased capital spending plans" (35.5%), "Decreased capital spending plans" (22.3%), and "No change to capital spending plans" (42.2%).

4b. When asked "why" in response to the previous question; 66.9 percent of respondents reported "General Business Outlook", (4.3%) of respondents reported "Prospects for Business Tax Reform," (1.8%) reported "Prospects for Regulatory Reform", (11.7%) reported "Other" and (15.3%) reported "Not Applicable".

OPERATING RATE

Manufacturing
Manufacturing purchasing and supply executives report their companies are currently operating at 85.8 percent of normal capacity. This is a 3.3 percent increase when compared to May 2017 (82.5%), and also an increase when compared to December 2016 (81.9%). The following 10 industries — listed in order — are operating at or above the average rate of 85.8 percent: Paper Products; Wood Products; Petroleum & Coal Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Computer & Electronic Products; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Transportation Equipment; and Chemical Products.

Non-Manufacturing
Non-manufacturing supply executives report their organizations are currently operating at 91.9 percent of normal capacity. This is higher than the 86.9 percent reported in May 2017, and the 85.2 percent reported in December 2016. Considering the production capacity increases reported in the following section of this forecast, this indicates that non-manufacturing industries are continuing to add capacity, but also find it necessary to maintain their capacity utilization at a relatively high level. The eight industries operating at or above the average capacity level of 91.9 percent — listed in order — are: Health Care & Social Assistance; Arts, Entertainment & Recreation; Educational Services; Utilities; Accommodation & Food Services; Management of Companies & Support Services; Real Estate, Rental & Leasing; and Public Administration.

Operating Rate


Manufacturing

Non-Manufacturing


Dec
2016

May
2017

Dec
2017

Dec
2016

May
2017

Dec

2017

90%+

38%

37%

50%

50%

62%

58%

50%-89%

61%

60%

49%

48%

36%

40%

Below 50%

1%

3%

1%

2%

2%

2%

Est. Overall Average

81.9%

82.5%

85.8%

85.2%

86.9%

91.9%

PRODUCTION CAPACITY

Manufacturing
Production capacity in manufacturing increased 4.3 percent in 2017, as 46 percent of purchasing and supply executives reported an average capacity increase of 10.5 percent, 6 percent reported an average decrease of 9.8 percent, and 48 percent reported no change. This compares to a predicted increase in production capacity of 3.3 percent for 2017 made in May 2017. Expectations for 2018 are for an increase of 2.7 percent. The 17 industries that report achieving an increase in production capacity in 2017 — listed in order — are: Textile Mills; Electrical Equipment, Appliances & Components; Wood Products; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Machinery; Primary Metals; Plastics & Rubber Products; Paper Products; Transportation Equipment; Computer & Electronic Products; Chemical Products; Furniture & Related Products; and Petroleum & Coal Products.

Manufacturing Production Capacity


Predicted For 2017

Reported For 2017

Predicted For 2018


Predicted
May 2017

Magnitude
of Change

Reported
Dec 2017

Magnitude
of Change

Predicted

Dec 2018

Magnitude
of Change

Higher

38%

+10.9%

46%

+10.5%

48%

+7.4%

Same

55%

NA

48%

NA

49%

NA

Lower

7%

-13.7%

6%

-9.8%

3%

-27.3%

Net Average


+3.3%


+4.3


+2.7%

The principal means of achieving increases in production capacity in 2017 were (in order of importance):

  1. More hours worked with existing personnel
  2. Additional personnel (permanent, temporary or contract)
  3. Additional plant and/or equipment
  4. Replaced equipment with technically advanced equipment

Non-Manufacturing
The capacity to produce products or provide services in the non-manufacturing sector increased 2.9 percent during 2017. This compares to the 1.9 percent increase reported in December 2016 for the year 2016, and is greater than May 2017 prediction of a 2.7 percent increase for 2017. For 2018, an increase of 3.4 percent is predicted. For 2017, 32 percent of non-manufacturing supply managers indicate increases averaging 10.9 percent, and 6 percent of respondents indicate decreases averaging 9.4 percent. Sixty-two percent see no change in their capacity. The 15 industries reporting increases in capacity in 2017 — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Arts, Entertainment & Recreation; Management of Companies & Support Services; Wholesale Trade; Information; Construction; Health Care & Social Assistance; Real Estate, Rental & Leasing; Retail Trade; Professional, Scientific & Technical Services; Transportation & Warehousing; Public Administration; Educational Services; Finance & Insurance; and Accommodation & Food Services.

Non-Manufacturing Production or Provision Capacity


Predicted For 2017

Reported For 2017

Predicted For 2018


Predicted

May 2017

Magnitude
of Change

Reported

Dec 2017

Magnitude
of Change

Predicted

Dec 2017

Magnitude
of Change

Higher

28%

+11.6%

32%

+10.9%

39%

+8.9%

Same

68%

NA

62%

NA

59%

NA

Lower

4%

-12.0%

6%

-9.4%

2%

-5.7%

Net Average


+2.7%


+2.9%


+3.4%

The principal means of achieving increases in production capacity in 2017 were (in order of importance):

  1. Additional personnel (permanent, temporary or contract)
  2. More hours worked with existing personnel
  3. Replaced equipment with technically advanced equipment
  4. Additional plant and/or equipment

CAPITAL EXPENDITURES — 2017 vs. 2016

Manufacturing
Purchasing and supply managers' report 2017 capital expenditures increased 8.7 percent on average when compared to 2016 levels. The actual expenditures for 2017 were above survey respondents' previous expectations, as they predicted an increase of 5.2 percent for 2017 in May 2017. The 44 percent of purchasers who reported increased capital expenditures in 2017 indicated an average increase of 28.5 percent, while the 15 percent who said their capital spending was reduced reported an average decrease of 26.5 percent. Forty-one percent of respondents said they spent the same in 2017 as in 2016. The 14 industries showing increases in capital expenditures for 2017 — listed in order of percentage increase — are: Furniture & Related Products; Wood Products; Computer & Electronic Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Textile Mills; Food, Beverage & Tobacco Products; Primary Metals; Chemical Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; Paper Products; Nonmetallic Mineral Products; and Printing & Related Support Activities.

Non-Manufacturing
Non-manufacturing supply management executives report their level of capital expenditures in 2017 increased 7 percent compared to 2016. This is less than the 10.6 percent increase reported for 2016 one year ago, and more than the 5.2 percent increase predicted by respondents in May 2017. Thirty-nine percent of respondents report increases averaging 25.4 percent. An additional 11 percent report decreases averaging 26.5 percent. Fifty percent indicate they spent the same on capital expenditures in 2017 as in 2016. The 12 industries experiencing increases in capital expenditures in 2017 — listed in order — are: Arts, Entertainment & Recreation; Construction; Wholesale Trade; Health Care & Social Assistance; Public Administration; Transportation & Warehousing; Professional, Scientific & Technical Services; Utilities; Retail Trade; Accommodation & Food Services; Real Estate, Rental & Leasing; and Management of Companies & Support Services.

Capital Expenditures 2017 vs. 2016


Manufacturing

Non-Manufacturing


Predicted
May 2017

Reported
Dec 2017

Magnitude
of Change

Predicted
May 2017

Reported
Dec 2017

Magnitude
of Change

Higher

30%

44%

+28.5%

36%

39%

+25.4%

Same

53%

41%

NA

49%

50%

NA

Lower

17%

15%

-26.5%

15%

11%

-26.5%

Net Average

+5.2%


+8.7%

+5.2%


+7.0%

PREDICTED CAPITAL EXPENDITURES — 2018 vs. 2017

Manufacturing
Purchasing and supply executives expect capital expenditures to increase 2.7% percent in 2018. The 41 percent of respondents who predict increased capital expenditures in 2018 indicate an average increase of 20.4 percent, while the 17 percent who said their capital spending would be reduced predict an average decrease of 31.2 percent. Forty-two percent said they expect to spend the same in 2018 as in 2017. The 13 industries predicting increases in capital expenditures for 2018 — listed in order of percentage increase — are: Wood Products; Petroleum & Coal Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Textile Mills; Paper Products; Chemical Products; Printing & Related Support Activities; Machinery; Primary Metals; and Nonmetallic Mineral Products.

Non-Manufacturing
Non-manufacturing purchasing and supply executives are expecting an increase of 3.8 percent in capital expenditures in 2018, less than the increase of 7 percent they are reporting for 2017. The 45 percent of respondents expecting to spend more on capital expenditures predict an average increase of 16.6 percent. An additional 13 percent anticipate a decrease averaging 26.3 percent. Forty-two percent expect to spend the same on capital expenditures in 2018 as in 2017. The 13 industries expecting increases in capital expenditures in 2018 — listed in order of percentage increase — are: Utilities; Public Administration; Transportation & Warehousing; Real Estate, Rental & Leasing; Retail Trade; Professional, Scientific & Technical Services; Information; Health Care & Social Assistance; Management of Companies & Support Services; Other Services; Finance & Insurance; Mining; and Wholesale Trade.

Predicted Capital Expenditures 2018 vs. 2017


Manufacturing

Non-Manufacturing


Predicted

Dec 2017

Magnitude

of Change

Predicted

Dec 2017

Magnitude

of Change

Higher

41%

+20.4%

45%

+16.6%

Same

42%

NA

42%

NA

Lower

17%

-31.2%

13%

-26.3%

Net Average


+2.7%


+3.8%







PRICES — Changes Between End of 2016 and End of 2017

Manufacturing
After an earlier forecast in May 2017 of a 2.5 percent increase in prices paid for raw materials in 2017, survey respondents now report realized price increases averaging 2.1 percent for the year 2017. The 60 percent who say their prices are higher now than at the end of 2016 report an average increase of 4.5 percent, while the 16 percent who report lower prices averaged a 4.1 percent decrease. The remaining 24 percent indicate no change between the end of 2017 and the end of 2016. The 14 industries experiencing average price increases in 2017 — listed in order — are: Wood Products; Textile Mills; Fabricated Metal Products; Plastics & Rubber Products; Chemical Products; Paper Products; Food, Beverage & Tobacco Products; Nonmetallic Mineral Products; Machinery; Furniture & Related Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Miscellaneous Manufacturing; and Printing & Related Support Activities.

Manufacturing Price Changes Between End of 2016 and End of 2017


Predicted
Dec 2016

Magnitude
of Change

Predicted
May 2017

Magnitude
of Change

Reported
Dec 2017

Magnitude
of Change

Higher

55%

+4.3%

64%

+4.8%

60%

+4.5%

Same

21%

NA

23%

NA

24%

NA

Lower

24%

-4.4%

13%

-4.5%

16%

-4.1%

Net Average


+1.3%


+2.5%


+2.1%

Non-Manufacturing
As 2017 draws to a close, non-manufacturing supply managers report prices they pay have increased by 1.6 percent this year. This is slightly more than the 1.5 percent increase they predicted in May 2017, and less than the 1.8 percent increase predicted for 2017 one year ago. Fifty-four percent of purchasers' report price increases averaging 4.8 percent. Thirteen percent of purchasers indicate decreased prices with an average reduction of 6.8 percent, and 33 percent of respondents have not experienced overall price changes this year. The 11 industries reporting price increases in 2017 — listed in order — are: Construction; Wholesale Trade; Professional, Scientific & Technical Services; Accommodation & Food Services; Arts, Entertainment & Recreation; Public Administration; Transportation & Warehousing; Finance & Insurance; Educational Services; Utilities; and Real Estate, Rental & Leasing.

Non-Manufacturing Price Changes Between End of 2016 and End of 2017


Predicted
Dec 2016

Magnitude
of Change

Predicted
May 2017

Magnitude
of Change

Reported
Dec 2017

Magnitude
of Change

Higher

53%

+4.7%

49%

+4.4%

54%

+4.8%

Same

36%

NA

39%

NA

33%

NA

Lower

11%

-6.1%

12%

-5.5%

13%

-6.8%

Net Average


+1.8%


+1.5%


+1.6%

PRICES – Predicted Changes Between End of 2017 and May 2018

Manufacturing
Fifty-seven percent of purchasing and supply managers expect the prices they pay to increase in early 2018 by an average of 3.2 percent. At the same time, 14 percent anticipate decreases averaging 3.4 percent. Including the 29 percent who expect no change in prices in the first four months of 2018, purchasers expect the net average overall price change to increase 1.3 percent. The 11 industries predicting a higher than 1.3 percent average increase in prices paid in the first part of 2018 — listed in order — are: Wood Products; Textile Mills; Printing & Related Support Activities; Food, Beverage & Tobacco Products; Primary Metals; Chemical Products; Fabricated Metal Products; Paper Products; Plastics & Rubber Products; Nonmetallic Mineral Products; and Machinery.

Non-Manufacturing
Non-manufacturing survey respondents predict their purchases in the first four months of 2018 will cost an average of 1.1 percent more than at the end of 2017. This is more than the 0.5 percent decrease reported in the preceding section for all of 2017. Considering the prediction of a price change for all of 2018 (2.2 percent), purchasing and supply executives expect most of next year's price increases to occur in the second part of next year. Fifty-seven percent of non-manufacturing respondents predict the prices they pay will increase an average of 3.4 percent in the first part of 2018. Ten percent of respondents expect price decreases averaging 7.2 percent. The remaining 33 percent predict no change in prices in the first four months of 2018. The nine industries predicting greater than or equal to the 1.1 percent average increase in prices they expect to pay in the first part of 2018 — listed in order of percentage increase — are: Mining; Public Administration; Construction; Accommodation & Food Services; Agriculture, Forestry, Fishing & Hunting; Transportation & Warehousing; Health Care & Social Assistance; Finance & Insurance; and Arts, Entertainment & Recreation.

Prices – Predicted Changes Between End of 2017 and May 2018


Manufacturing

Non-Manufacturing


Predicted

Dec 2017

Magnitude
of Change

Predicted

Dec 2017

Magnitude

of Change

Higher

57%

+3.2%

57%

+3.4%

Same

29%

NA

33%

NA

Lower

14%

-3.4%

10%

-7.2%

Net Average


+1.3%


+1.1%







PRICES — Predicted Changes Between End of 2017 and End of 2018

Manufacturing
Respondents predict a net average increase in prices paid of 1.8 percent between December 2017 and December 2018, indicating they expect prices to increase an additional 0.5 percent during the period of May 2018 through December 2018. Sixty percent of respondents expect an average price increase of 3.9 percent for the full year of 2018, while 17 percent expect an average reduction of 3.2 percent. The remaining 23 percent expect no change in their average prices paid for the year 2018. The 11 industries expecting to receive increases above the predicted average of 1.8 percent by the end of 2018 — listed in order — are: Wood Products; Textile Mills; Nonmetallic Mineral Products; Primary Metals; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Paper Products; Chemical Products; Plastics & Rubber Products; and Machinery.

Non-Manufacturing
For all of 2018, non-manufacturing supply management executives expect their prices to increase an average of 2.2 percent. Sixty-three percent of respondents expect increases averaging 4.5 percent, 10 percent anticipate prices to drop an average of 6.5 percent, and 27 percent foresee no change in prices during the next year. The seven industries expecting greater than the 2.2 percent average price increase by the end of 2018 — listed in order of percentage increase — are: Construction; Retail Trade; Public Administration; Professional, Scientific & Technical Services; Agriculture, Forestry, Fishing & Hunting; Transportation & Warehousing; and Accommodation & Food Services.

Predicted Price Changes Between End of 2017 and End of 2018


Manufacturing

Non-Manufacturing


Predicted

Dec 2017

Magnitude

of Change

Predicted

Dec 2017

Magnitude

of Change

Higher

60%

+3.9%

63%

+4.5%

Same

23%

NA

27%

NA

Lower

17%

-3.2%

10%

-6.5%

Net Average


+1.8%


+2.2%







LABOR AND BENEFIT COSTS — Predicted Rate Change End of 2017 vs. End of 2018

Manufacturing
Purchasing and supply executives expect higher overall labor and benefit costs for 2018. Sixty-seven percent of respondents expect increased labor and benefit costs and expect them to grow by an average of 3.3 percent for all of 2018, while the 4 percent forecasting lower costs see them decreasing by an average of 2.7 percent. Including the 29 percent of respondents who believe costs will remain the same, the overall net rate of increase is expected to be 2.1 percent between the end of 2017 and the end of 2018. The 10 industries expecting to pay an increase of 2.1 percent or greater — listed in order of percentage increase — are: Textile Mills; Wood Products; Fabricated Metal Products; Nonmetallic Mineral Products; Furniture & Related Products; Paper Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Machinery; and Chemical Products.

Non-Manufacturing
Purchasing and supply executives expect a 2.6 percent increase in labor and benefit costs for non-manufacturing industries in 2018. Sixty-four percent of respondents expect such costs to increase by an average of 4.4 percent. Another 3 percent of respondents expect labor and benefit costs to shrink by an average of 8.8 percent, and 33 percent believe costs will remain stable during 2018. The eight industries expecting to pay an increase of 2.6 percent or higher — listed in order of percentage increase — are: Construction; Mining; Wholesale Trade; Agriculture, Forestry, Fishing & Hunting; Information; Accommodation & Food Services; Retail Trade; and Public Administration.


Labor and Benefit Costs — Predicted Rate Change End of 2017 vs. End of 2018


Manufacturing

Non-Manufacturing


Predicted for
2017

Dec 2016

Predicted for
2018

Dec 2017

Magnitude

of Change

Predicted for
2017

Dec 2016

Predicted for
2018

Dec 2017

Magnitude

of Change

Higher

68%

67%

+3.3%

66%

64%

+4.4%

Same

30%

29%

NA

27%

33%

NA

Lower

2%

4%

-2.7%

7%

3%

-8.8%

Net Average

+2.5%


+2.1%

+2.5%


+2.6%

EMPLOYMENT — Change in Overall Employment

Manufacturing
ISM's Manufacturing Business Survey Committee members report that manufacturing employment increased 2.3 percent in 2017 relative to 2016, and forecast that employment will increase by 1.2 percent, on average, for the full year of 2018 relative to 2017. Forty-four percent of respondents expect employment to be 4.8 percent higher in 2018, while 10 percent predict employment to be lower by 9.7 percent. The remaining 46 percent of respondents expect their employment levels to be unchanged in 2018. The 13 industries predicting increases in employment in 2018 — listed in order — are: Fabricated Metal Products; Miscellaneous Manufacturing; Textile Mills; Plastics & Rubber Products; Machinery; Paper Products; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; Primary Metals; Chemical Products; Printing & Related Support Activities; Furniture & Related Products; and Transportation Equipment.

Manufacturing Change in Overall Employment


R



There is no comments yet.

You must login Login Sign up