US' economic growth to continue in 2024: ISM

Revenues in the manufacturing sector are expected to rise in 15 out of 18 industries, with the apparel, leather, and allied products industry anticipating the largest increase. Survey respondents predict a 5.6-per cent net increase in overall revenues for 2024, a substantial climb from the 0.9-per cent increase recorded in 2023, as per ISM.

Manufacturing companies are reportedly operating at 83 per cent of their normal capacity, a slight increase from 82 per cent in May 2023. This upward trend is expected to continue with capital expenditures in the manufacturing sector projected to grow by 11.9 per cent in 2024, following a 14.9-per cent increase in 2023.

Employment in the manufacturing sector is also forecast to expand by 2 per cent in 2024, accompanied by a predicted average increase in labor and benefit costs of 5.2 per cent. The US dollar is expected to strengthen against the currencies of major trading partners.

Additionally, the panel foresees a 3.2 per cent rise in prices paid for raw materials in the first five months of 2024, with an overall increase of 3.3 per cent for the year. This follows a 4.1 per cent hike in raw material prices in 2023.

Production capacity in manufacturing witnessed a 0.7 per cent increase in 2023. For 2024, the expectations are set for a 7.8 per cent increase, with industries like apparel, leather, and allied products expecting a boost in production capacity.

"Manufacturing's purchasing and supply executives expect to see overall growth in 2024. They are optimistic about overall business prospects for the first half of 2024 and more excited about faster growth in the second half. Respondents expect raw materials pricing pressure to ease in 2024 and see H1 2024 profit margins improving over H2 2023. Wages and employment will continue to grow. Manufacturers also predict growth in both exports and imports in 2024," said Timothy R Fiore, CPSM, C.P.M, chair of the ISM Manufacturing Business Survey Committee.

ALCHEMPro News Desk (DP)