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ISM: Economic growth to continue throughout 2015

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ISM: Economic growth to continue throughout 2015

But expectations for expansion are dampened from 2014.

The nation’s purchasing and supply executives expect that economic growth will continue in the United States throughout the remainder of 2015. According to a new report from the Institute of Supply Management, expectations for the remainder of 2015 continue to be positive in both the manufacturing and non-manufacturing sectors.

Manufacturing is optimistic, but less so than in 2014
Fifty-five percent of respondents from the panel of manufacturing supply management executives predict their revenues will be 9% greater in 2015 compared to 2014, 16% expect an 8.9% decline, and 29% foresee no change in revenue. This yields an overall average expectation of 3.5% revenue growth among manufacturers in 2015, which is a meaningful decrease of 2.1 percentage points from December 2014 when the panel predicted a 5.6% increase in 2015 revenues. With operating capacity at 79.5%, an expected capital expenditure increase of 3.1%, prices paid for raw materials expected to decrease a 0.9 percentage point for all of 2015 compared to 2014, and employment expected to grow 0.7% for the balance of 2015, manufacturing is positioned to grow revenues while containing costs through the remainder of the year.

"With 14 of the 18 industries within the manufacturing sector predicting revenue growth in 2015 when compared to 2014, U.S. manufacturing continues to move in a positive direction," said Bradley J. Holcomb, chair of the ISM Manufacturing Business Survey Committee.

Manufacturing is positioned to grow revenues while containing costs through the remainder of the year.

Non-Manufacturing also ease growth expectations
Fifty-four percent of non-manufacturing purchasing and supply executives expect their 2015 revenues to be greater by 8.9% than in 2014. Overall, respondents currently expect a 2.9% net increase in overall revenues, which is significantly less than the 10 % increase that was forecast in December 2014.

"Non-manufacturing will continue to grow for the balance of 2015. Non-manufacturing companies continue to operate very efficiently as reflected by the high percentage of capacity utilization. Supply managers have indicated that overall costs have been minimally impacted with pricing projected to increase 0.6% over the year. Overall employment is projected to grow a modest 2%. Thirteen out of 18 industries are forecasting increased revenues, which is less than the 17 industries that forecasted increased revenues last year.  Despite a cooling off in the rate of growth, the non-manufacturing sector will continue on the path of economic growth throughout the year," said Anthony S. Nieves, chair of the ISM Non-Manufacturing Business Survey Committee.

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