Economic growth in the United States will resume in 2010, say the nation's purchasing and supply management executives in their December 2009 Semiannual Economic Forecast. Expectations for 2010 are for positive conditions experienced in the second half of 2009 to continue in manufacturing, while the non-manufacturing sector foresees marginal growth.
The overall forecast projects optimism about the US economy for 2010. The manufacturing sector overall is positive about 2010 with revenues expected to increase in 13 of 18 industries, while the non-manufacturing sector appears slightly less positive about the year ahead with eight of 18 industries expecting higher revenues. Business investment, a major driver in the US economy, will decline as both sectors expect a combined average of a 5.4% decline in capital spending.
These projections are part of the forecast issued by the Business Survey Committee of the Institute for Supply Management (ISM).
Expectations for 2010 are positive as 60% of survey respondents expect revenues to be greater in 2010 than in 2009. The panel of purchasing and supply executives expects a 5.7% net increase in overall revenues for 2010, compared with a 10.7% decrease reported for 2009.
In the manufacturing sector, respondents report operating at 70.1% of their normal capacity, up from 67% reported in April 2009. Purchasing and supply executives predict that capital expenditures will decrease by 4% in 2010, versus a 7.8% decrease reported for 2009. Survey respondents also forecast that they will reduce inventories in an effort to improve their purchased inventory-to-sales ratio in 2010. Manufacturers have an expectation that employment in the sector will increase by 1.5%, while labor and benefits costs are expected to increase an average of 1.4% in 2010. Manufacturing purchasers are predicting strength in exports and imports in 2010. They also expect the US dollar to weaken on average against the currencies of major trading partners.