USA | Supply chains across the United States will benefit from economic improvement in 2025, according to new industry data.
Economic improvement in the United States will continue in 2025, according to the nation's purchasing and supply management executives in the December 2024 ISM Supply Chain Planning Forecast, formerly known as the Semiannual Economic Forecast.
Revenues are expected to increase in 17 of 18 manufacturing industries and 16 of 18 services-sector industries. Capital expenditures are expected to increase by 5.2 percent in the manufacturing sector (after a 5.6-percent increase in 2024) and increase by 5.1 percent in the services sector (after a 2.8-percent increase in 2024). In 2025, employment is expected to grow by 0.8 percent in manufacturing and 0.8 percent in services. After projected growth in manufacturing and services in the first half (H1) of the year, growth in the second half (H2) is projected to accelerate in manufacturing and maintain momentum in the services sector.
Ecconomic expectations for 2025 are positive, as 60 percent of survey respondents expect revenues to be greater in 2025 than in 2024. The panel of purchasing and supply executives expects a 4.2-percent net increase in overall revenues for 2025, compared to a 0.8 percentage point increase reported for 2024. Sixteen of the 18 manufacturing industries expect revenue improvement in 2025, listed in order of largest to smallest projected increase: Computer and Electronic Products; Machinery; Electrical Equipment, Appliances and Components; Food, Beverage and Tobacco Products; Petroleum and Coal Products; Transportation Equipment; Miscellaneous Manufacturing; Paper Products; Primary Metals; Plastics and Rubber Products; Chemical Products; Nonmetallic Mineral Products; Wood Products; Printing and Related Support Activities; Furniture and Related Products; and Fabricated Metal Products.
"Manufacturing's purchasing and supply executives expect to see overall growth in 2025. They are optimistic about overall business prospects for the first half of 2025 and more excited about faster growth in the second half. According to the ISM Report On Business, manufacturing grew for 28 consecutive months from June 2020 through September 2022, was unchanged in October and dipped into contraction in November 2022. The index has remained in contraction since, except for a reading of 50.3 percent in March 2024. Respondents expect raw materials pricing pressure to ease in 2025 and see first-half 2025 profit margins improving over the second half of 2024. Wages and employment will continue to grow. Manufacturers also predict growth in both exports and imports in 2025," said Timothy R. Fiore, CPSM, C.P.M, Chair of the ISM Manufacturing Business Survey Committee.
In the manufacturing sector, respondents report the companies operating at 82.3 percent of normal capacity, down 0.5 percentage point from the 82.8 percent reported in May 2024. Purchasing and supply executives predict that capital expenditures will increase year over year by 5.2 percent in 2025, compared to a 5.6-percent increase reported for 2024. Manufacturers expect employment in the sector to grow by 0.8 percentage point in 2025 relative to December 2024 levels, while labour and benefit costs are expected to increase an average of 3.3 percent. Respondents also expect the U.S. dollar to strengthen against the currencies of seven major trading partners in 2025.
The Business Survey Panel predicts that prices paid for raw materials will increase three percent during the first five months of the year, with an overall increase of three percent for 2025. This equates to a reported 3-percent increase in raw materials prices in 2024.
More news here.
