WASHINGTON (MNI) – U.S. manufacturers slightly revised down their
revenue growth expectations for this year, while their counterparts in
the non-manufacturing sector have raised their forecasts, the Institute
for Supply Management said Tuesday.

According to its spring 2012 Semiannual Economic Forecast,
purchasing and supply executives project that economic growth will
continue in the United States throughout the remainder of 2012.

These projections are part of the forecast issued by ISM’s Business
Survey Committee.

A summary of the results show an overall average expectation of
4.5% revenue growth among manufacturers in 2012, down from December 2011
when the panel predicted a 5.5% increase in 2012 revenues.

“With operating capacity at 81.6%, an expected capital expenditure
increase of 6.2%, and prices paid expected to increase a modest 0.4%
from now through the end of 2012, manufacturers are positioned to grow
revenues and contain costs through the remainder of the year,” ISM said
in a statement.

On the non-manufacturing side, respondents now predict a 4.8% net
increase in overall revenues, greater than the 3.1% uptick forecast in
December 2011.

“Non-manufacturing companies reflect strong capacity utilization
coupled with forecasted revenue growth. This indicates that
non-manufacturing companies are streamlined and efficient,” ISM’s
Anthony Nieves said.

Additional details provided by ISM show that manufacturing capital
investment is projected to increase 6.2%, a major jump from the 1.9%
rise predicted in December. As mentioned above, capacity utilization is
currently at 81.6%, an increase from 79.2% in December.

On the non-manufacturing side, executives see capital investment
rising by 3.6% this year, while capacity utilization is at 85.2% — the
same as in December.

The following are excerpts from the ISM release:

Manufacturing Summary

Sixty-six percent of respondents from the panel of manufacturing
supply management executives predict revenues will be 9.5 percent
greater in 2012 compared to 2011, 15 percent expect a 12.1 percent
decline, and 19 percent foresee no change. This yields an overall
average expectation of 4.5 percent revenue growth among manufacturers in
2012, which is a modest reduction of 1 percentage point from December
2011 when the panel predicted a 5.5 percent increase in 2012 revenues.
With operating capacity at 81.6 percent, an expected capital expenditure
increase of 6.2 percent, and prices paid expected to increase a modest
0.4 percent from now through the end of 2012, manufacturers are
positioned to grow revenues and contain costs through the remainder of
the year. “With 16 out of 18 industries within the manufacturing sector
predicting growth in 2012 over 2011, manufacturing continues to
demonstrate its strength and resilience in the midst of global economic
uncertainty and volatility. Capacity utilization is at historically
typical levels and manufacturers are continuing to invest in their
businesses. The positive forecast for revenue growth and modest price
increases will drive a continuation of the recovery in the manufacturing
sector,” said Holcomb.

The 16 industries reporting expectations of growth in revenue for
2012 – listed in order – are: Apparel, Leather & Allied Products;
Machinery; Primary Metals; Petroleum & Coal Products; Plastics & Rubber
Products; Furniture & Related Products; Electrical Equipment, Appliances
& Components; Nonmetallic Mineral Products; Transportation Equipment;
Printing & Related Support Activities; Textile Mills; Miscellaneous
Manufacturing; Food, Beverage & Tobacco Products; Chemical Products;
Paper Products; and Fabricated Metal Products.

Non-Manufacturing Summary

Fifty-five percent of non-manufacturing purchasing and supply
executives expect their 2012 revenues to be greater by 9.9 percent than
in 2011. Overall, respondents currently expect a 4.8 percent net
increase in overall revenues, which is greater than the 3.1 percent
increase that was forecast in December 2011. “Non-manufacturing will
continue to grow for the balance of 2012. Non-manufacturing companies
reflect strong capacity utilization coupled with forecasted revenue
growth. This indicates that non-manufacturing companies are streamlined
and efficient. Overall costs have been contained despite strong
increases for fuel and petroleum-based products. Slow employment growth
continues to be a challenge for the non-manufacturing sector,” Nieves
said.

The 17 non-manufacturing industries expecting increases in revenue
in 2012 – listed in order – are: Information; Mining; Finance &
Insurance; Agriculture, Forestry, Fishing & Hunting; Other Services;
Transportation & Warehousing; Professional, Scientific & Technical
Services; Construction; Wholesale Trade; Retail Trade; Arts,
Entertainment & Recreation; Management of Companies & Support Services;
Accommodation & Food Services; Public Administration; Real Estate,
Rental & Leasing; Health Care & Social Assistance; and Utilities.

** MNI Washington Bureau: 202-371-2121 **

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