Economic growth will continue throughout 2018, according to the Spring 2018 Semiannual Economic Forecast from the Institute for Supply Management. Purchasing and supply executives responding to the ISM survey said conditions will remain positive in both the manufacturing and non-manufacturing sectors.
Manufacturing industry professionals said they expect an average 6.6 percent revenue increase this year compared to 2017, 1.5 percentage points above the group’s December forecast and 2.5 percentage points above the actual revenue growth reported in 2017. Respondents said they expect to operate at 85.8 percent capacity this year, with an expected capital expenditure increase of 10 percent, a 5 percent increase in raw materials prices, and a 1.8 percent increase in employment compared to last year.
Raw materials price increases and trouble finding qualified workers remain key challenges, according to Timothy R. Fiore, chairman of the ISM Manufacturing Business Survey committee, who released the report May 7. Respondents were asked additional questions about the labor issue, revealing the following insights:
77.9 percent said they have had difficulty hiring workers to fill open positions in the last six months;
53.3 percent said they have raised wages to recruit new hires in the past six months;
47.9 percent said they have offered additional training for new hires in the last six months.
Respondents were also asked about the implications of tariffs to their business, with most saying they will affect both product pricing and supply chain operations. Nearly 74 percent said they believe tariffs will raise the price of their products to customers, and nearly 56 percent said they will cause delays and disruptions to their supply chains.