The U.S. economy is expected to continue expanding through the rest of 2026, according to the Institute for Supply Management’s Spring 2026 ISM Supply Chain Planning Forecast.

The report, released June 18, said expectations for the remainder of 2026 are higher than those expressed in ISM’s December 2025 forecast, with both manufacturing and services executives projecting stronger revenue growth, higher capital expenditures and elevated capacity utilization.

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In manufacturing, ISM said revenue is expected to increase 8.4% in 2026, up from the 4.4% growth forecast issued in December and above the 2.5% year-over-year increase reported for 2025. Eighty-two percent of manufacturing respondents expect revenue to increase, with an average gain of 12.7%, while 17% expect revenue declines averaging 12%.

Manufacturing companies are operating at 86.9% of normal capacity, according to ISM. Respondents expect capital expenditures to increase 4.9% in 2026, raw materials prices to rise 14.1% and employment to increase 1.4% by year-end. ISM said 14 of 18 manufacturing industries expect revenue growth in 2026, while seven expect employment gains.

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“With 14 manufacturing industries expecting revenue growth and seven industries expecting employment growth in 2026, panelists forecast a healthy rest of the year,” said Susan Spence, Chair of ISM’s Manufacturing Business Survey Committee.

In services, respondents expect 8.6% revenue growth in 2026, also 4 percentage points higher than the December forecast. Eighty-one percent of services respondents expect revenue to increase by an average of 12.9%, while 15% expect revenue to decline by an average of 11.3% and 4% expect no change.

Services companies are operating at 91.3% of normal capacity. ISM said services executives expect prices to increase 8.9% over the year, while employment is projected to grow 0.9 percentage point. Sixteen of 18 services industries forecast higher revenues in 2026, the same number projected in the December 2025 forecast.

“The services sector will continue to lead the economy in 2026,” said Steve Miller, Chair of ISM’s Services Business Survey Committee.