Manufacturing companies still predict growth in 2024, though less than they did

TEMPE, Ariz. – Despite nearly all the past 12 months showing a decline, U.S. manufacturing companies are still optimistic on growth for 2024, according to the Institute for Supply Management in its semi-annual report.

The declines have been felt though, with manufacturers predicting less growth than they did when surveyed in December. Revenue is expected to increase 2.1% for the year (vs. 5.6% when asked in December 2023), with 44% of respondents expecting an increase (vs. 58% in December). Around 14% expect revenue to decline.

Those expecting an increase predict revenue to rise by around 8.6% on average, while those expecting a decline predict revenue to fall by 12.3%.

The furniture industry is one of 12, of the 18 manufacturing industries recognized by the ISM, that expects revenue improvement.

“With 12 manufacturing industries expecting revenue growth in 2024 and nine industries expecting employment growth in 2024, panelists forecast that recovery will continue the rest of the year, albeit somewhat softer than originally expected,” said Timothy R. Fiore, ISM chairman.

Production capacity is expected to rise 2.4%, compared with a 7.8% prediction in December. The furniture industry was one of 12 expecting an increase and the second-biggest at that. Respondents predict a 1% gain in capital expenditures for the year, much lower than the 11.9% prediction in December. The furniture industry also expects the second-biggest increase in capital expenditures.

Predictions of unemployment are mixed, with 23% predicting an increase and 15% predicting a decrease. Around 62% believe levels won’t change.

In May, 56% of respondents indicated they had difficulty in hiring for open positions vs. 75% reporting difficulty in December. Raising wages is the main way businesses are aiming to address hiring issues, with the second-biggest reason being “we didn’t hire as many as we would have liked.”

See the full report here.

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