The U.S. economy is expected to continue to expand for the rest of 2022, the nation’s purchasing and supply executives said in the Spring 2022 Semiannual Economic Forecast from the Institute for Supply Management (ISM), which found furniture and apparel makers feeling bullish on the revenue front.
Expectations for the remainder for 2022 were similar to those expressed in December, despite continued inflation and geopolitical unrest. Manufacturing revenue for 2022 is expected to increase an average of 9.2 percent, 2.7 percent higher than the December forecast but 4.9 percent lower than the year-over-year increase reported for 2021.
“With 16 manufacturing sector industries expecting revenue growth in 2022 and 13 industries expecting employment growth in 2022, panelists forecast that recovery will continue the rest of the year,” Timothy R. Fiore, chair of the ISM Manufacturing Business Survey Committee, said. “Sentiment in each sector was generally consistent with industry performance reports in the April 2022 Manufacturing ISM ‘Report On Business,’ as well as the fall ‘Semiannual Economic Forecast’ conducted in December.”
Sixteen of 18 industries report projected revenue increases, led by apparel, leather and allied products, and including furniture and related products.
Services sector respondents said they expect a 4.9 percent net increase in overall revenues, which was 0.6 percent higher than December.
“The services sector will continue to grow for the rest of 2022,” Anthony S. Nieves, chair of the ISM Services Business Survey Committee. “Each of the 18 industries forecast increased revenues, up from the 16 industries that predicted increases in December.”
This included transportation and warehousing, wholesale trade and retail Trade.
Purchasing and supply executives reported that their companies were operating at 87.2 percent of normal capacity, which was 1.5 percent lower than the figure reported in December. The eight industries reporting operating capacity levels above the average rate of 87.2 percent included apparel, leather and allied products.
Service organizations were operating at 91 percent of normal capacity, according to Business Survey Committee respondents, 1.6 percent higher compared to December. The 10 industries operating at capacity levels above the average rate of 91 percent included retail trade, and transportation and warehousing.
Manufacturing production capacity is expected to increase 5.8 percent in 2022–in December, panelists reported an increase of 3.5 percent for 2021 and projected an increase of 6.8 percent this year. The 15 industries expecting production capacity increases for 2022 were topped by apparel, leather and allied products, and included furniture and related products.
The capacity to produce products or provide services in the services sector was forecast to rise 1.2 percent in 2022. This compares to an increase of 2.3 percent reported for 2021 and a December projection of a 3.3 percent gain for this year.
The 13 industries expecting production capacity increases for 2022 included transportation and warehousing, and wholesale and retail trades.
Manufacturing survey respondents expected a 7.4 percent increase in capital expenditures in 2022, slightly lower than the 7.7 percent expansion forecast by the panel in December. The 12 industries expecting year-over-year increases in capital expenditures included furniture and related products, and apparel, leather and allied products.
This year, services purchasing and supply executives expect a capital expenditures increase of 6.2 percent compared to 2021. The 13 industries expecting an increase in capital expenditures included transportation and warehousing, and wholesale and retail trades.
In the December forecast, manufacturing respondents predicted an increase of 8.2 percent in prices paid during the first four months of 2022, In this survey, they reported prices increased 11.4 percent.
All 18 manufacturing industries reported an increase in prices paid for the first part of 2022, led by textile mills and including apparel, leather and allied products, and furniture and related products.
Services respondents reported that purchases during the first four months of this year cost an average of 8.7 percent more than at the end of 2021. This was 0.2 percent lower than the 8.9 percent increase predicted in December.
All 18 industries reported an increase in prices paid in the first part of 2022, including wholesale trade, transportation and warehousing, and retail trade.
Manufacturing survey respondents expect a year-over-year, net-average prices increase of 11.1 percent for 2022. With respondents reporting price increases of 11.4 percent through April, prices are projected to ease slightly over the rest of the year.
All 18 industries expect price increases for all of 2022, topped by textile mills and including furniture and related products, and apparel, leather and allied products.
This year, services respondents expect prices to increase an average of 9.6 percent compared to the end of 2021. With respondents reporting an increase of 8.7 percent through April, prices are projected increase over the rest of the year.
All 18 industries project price increases for all of 2022, including transportation and warehousing, and wholesale and retail trades.
ISM’s Manufacturing Business Survey Committee respondents forecast that sector employment in 2022 will increase 3.2 percent year over year. The 13 industries projecting employment growth during 2022 were led by apparel, leather and allied products, and included furniture and related products.
Services sector employment will increase 2.5 percent in 2022, according to the forecast of ISM’s Services Business Survey Committee respondents. The 12 industries anticipating increases in employment included transportation and warehousing, and wholesale trade.