The economic recovery in the U.S. will continue for the rest of 2021, the nation’s purchasing and supply executives said in the Spring 2021 “Semiannual Economic Forecast” from the Institute for Supply Management (ISM) Business Survey Committees.
ISM said expectations for the remainder for 2021 have improved somewhat compared to December 2020, “as there is hope that the corner has been turned on the coronavirus pandemic, with both manufacturing and services sectors signaling expansion.”
Revenue for 2021 is expected to increase 7.2 percent on average. This is 0.3 percent higher than the December 2020 forecast of 6.9 percent and 8.5 percent above the 1.3 percent decrease reported for 2020 over 2019.
The survey showed 59 percent of respondents felt revenues for 2021 will increase 13.8 percent over 2020. Only 8 percent said revenues will decrease 13 percent and 33 percent indicated no change.
“With all 18 manufacturing-sector industries predicting revenue growth in 2021, panelists forecast that recovery will continue the rest of the year,” Timothy R. Fiore, chair of the ISM Manufacturing Business Survey Committee, said. “The sectors’ responses were consistent with the industry-performance reports in the April 2021 ‘Report On Business.’”
Those sectors include textile mills, and apparel, leather and allied products.
Purchasing and supply executives reported that their companies are operating, on average, at 88.3 percent of normal capacity, 2.6 percent higher than reported in December. The nine industries reporting operating-capacity levels above the average rate of 88.3 percent included apparel, leather and allied products.
Production capacity in manufacturing is seen rising 6.6 percent in 2021. This compares to an increase of 0.5 percent reported for 2020 and a December projection of an increase of 5.3 percent this year. Textile mills were among the 16 industries expecting production capacity increases for 2021.
Survey respondents expect an 8.7 percent gain in capital expenditures in 2021. This is higher than the 2.4 percent increase for the year forecast by the panel in December. The 11 industries expecting increases in capital expenditures in 2021 compared to 2020 included textile mills.
In the December 2020 forecast, respondents predicted an increase of 2.5 percent in prices paid during the first four months of 2021, but now they reported prices had risen 8.3 percent. All 18 manufacturing industries reported an increase in prices paid for the first part of 2021.
Survey respondents projected a net average price increase of 8.1 percent for all of 2021 compared to the end of 2020–74 percent forecast prices to increase 11.1 percent for the full year, with all industries expecting price hikes for all of 2021.
The respondents also forecast that manufacturing employment will increase 2.8 percent by the end of 2021 compared to the end of 2020. Textile mills were among the 15 sectors projecting employment growth during the year.