US manufacturing, services executives see continued growth

US manufacturing and services firms expect to see a stronger economy and rising revenue into 2018, according to a semi-annual survey released Monday. The companies project no let down after 11 months of continuous growth, with the upbeat outlook across nearly all industries, the Institute of Supply Management's latest economic forecast showed.
"Manufacturing purchasing and supply executives expect to see growth in 2018. They are optimistic about their overall business prospects for the first half of 2018, with business continuing to expand through the second half of 2018," said Timothy R. Fiore, chair of the ISM Manufacturing Business Survey Committee. Manufacturing revenues are expected to rise 7.8 percent next year, with 70 percent of firms projecting increased earnings, according to the survey. Only four percent of companies expected business to worsen, while a quarter see no change.
In the dominant services sector, the outlook is slightly less rosy, with the average increase is expected to be six percent, and 59 percent of companies expecting business to improve. Just 10 percent of firms expect business to decline, with one-third projecting no change. However, well over 60 percent of the firms in manufacturing and services report difficulty finding workers to fill open positions, according to the survey. As a result 44 percent of manufacturing firms, and 37 percent of services companies reporting raising wages to attract employees.
Manufacturers expect employment will grow by 1.2 percent next year, while labour and benefit costs are expected to increase an average of 2.1 percent next year. Services firms see employment rising 1.5 percent, and wages and benefits increasing 2.6 percent.
Capital expenditures, investment in plant and equipment, a major driver in the US economy, are expected to increase by 2.7 percent in the manufacturing sector and by 3.8 percent in the non-manufacturing sector. Capital expenditures - investment in plant and equipment - a major driver of the US economy are expected to increase by 2.7 percent in the manufacturing sector and by 3.8 percent in the non-manufacturing sector.
The industries see only small increases in costs for materials, rising 2.2 percent for the services sector and 1.8 percent for manufacturing inputs, slightly less than in 2017.