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7 May 2014 | Gurjit Degun in Las Vegas, US
Purchasing professionals in the US expect the country’s economic growth to continue for the rest of the year, with a positive outlook for both manufacturing and non-manufacturing sectors.
The Institute for Supply Management’s (ISM’s) Spring 2014 Semiannual Economic Forecast reported 68 per cent of manufacturing supply management executives predicted revenues will be 9.1 per cent greater in 2014 compared with 2013. Some 9 per cent expected a 9.6 per cent decline, and 23 per cent foresaw no change. The report said this yields an overall average expectation of 5.3 per cent growth in revenue among manufacturers in 2014.
“With all 18 industries within the manufacturing sector predicting growth in 2014 when compared with 2013, US manufacturing continues to demonstrate its broad-based strength, efficiency and leadership in the world economy,” said Bradley Holcomb, chair of the ISM Manufacturing Business Survey Committee.
For other industries, 51 per cent of non-manufacturing purchasing and supply executives expect 2014 revenues to be 6.7 per cent higher than in 2013.
“Non-manufacturing companies continue to operate very efficiently as reflected by the high percentage of capacity utilisation,” said Anthony Nieves, chair of the ISM Non-Manufacturing Business Survey Committee. “Despite the volatility in energy and fuel costs, supply managers have indicated that overall costs have not been substantially impacted.”
Speaking at the business survey presentation at the ISM annual conference in Las Vegas, US yesterday Mark Zandi, chief economist at Moody’s Analytics, said he is “optimistic about the US economy”.
He added he believed commodity prices will remain “relatively modest… at least until 2016”. He said: “Obviously there are some risks around this but barring any unforeseen weather events I think the price outlook is very good.”
Zandi also expects companies to become more competitive which will lead to fewer firms offshoring. “I think our long-term growth prospects over the next couple of decades are very very good. The last couple of decades we have struggled, we have not been particularly competitive – a lot of activities have moved from the US to other parts of the world.
“But I think this dynamic is going to flip and we are in a very good spot. We are very competitive so we will benefit from a significant wave of onshore activity.”