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Manufacturing Expected to Expand in 2011, ISM Reports

In its Semiannual Economic Forecast, the Institute for Supply Management expects the manufacturing sector to expand in 2011, revenue to increase 5.6 percent, and capital expenditures to grow 14.5 percent. Overall, the report demonstrates optimism for general economic growth next year.

"Manufacturing purchasing and supply executives have expectations for continued growth and are optimistic about their organizations' prospects as they consider the first half of 2011, and they are even more positive about the second half," said Norbert J. Ore, CPSM, C.P.M., chair of the ISM Manufacturing Business Survey Committee. "While 2010 has been a year of recovery in manufacturing, our forecast sees improvements in both investment and employment in 2011. Respondents expect cost pressures in 2011 to be somewhat greater than in 2010. Manufacturing growth is now in its 16th consecutive month as measured by and reported in the monthly Manufacturing ISM Report On Business."

Sixty-five percent of surveyed manufacturers expected higher revenues in 2011 than they earned in 2010. Those surveyed estimated a 5.6 percent net growth in overall 2011 revenues.

Manufacturing respondents said they were operating at 80.2 percent of normal capacity, an increase of 72.8 percent in April 2010. They also expected to reduce inventories and see manufacturing sector employment rise by 1.8 percent in 2011.

Purchasing and supply executives surveyed expected to increase capital expenditures by 14.5 percent in 2011, up from the 5.9 percent they predicted in 2010.

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