#United States #Tempe #U.S. Manufacturing #ISM #Economic Improvement

Strong Economic Growth Expected in 2025

The latest forecast from the Institute for Supply Management® (ISM) anticipates that the U.S. economy will continue its upward trajectory throughout 2025. According to purchasing and supply management executives, significant revenue growth is expected across numerous sectors, notably manufacturing and services. The report indicates that 17 out of 18 manufacturing industries and 16 out of 18 service sectors predict an increase in revenues next year.

Manufacturing Sector Insights

In manufacturing, an overall revenue increase of 4.2% is forecasted for 2025, up from a modest projected increase of 0.8% in 2024. Notably, 60% of survey participants expressed optimism about achieving better financial results in 2025 compared to 2024. Key sectors expected to enjoy robust revenue gains include:

• - Computer and Electronic Products
• - Machinery
• - Electrical Equipment, Appliances & Components
• - Food, Beverage & Tobacco Products

Manufacturers are predicting a capital investments increase of 5.2%, demonstrating confidence to expand operations despite facing challenges like raw materials pricing pressures which are expected to ease in the coming year.

Services Sector Projections

The services sector is also on track for a good performance, with a forecasted revenue increase of 3.9%. Like manufacturers, nearly 59% of services supply executives anticipate higher revenues in 2025. Sectors that are poised for boosts include:

• - Professional, Scientific & Technical Services
• - Accommodation & Food Services
• - Arts, Entertainment & Recreation

Capital expenditures in the services industry are projected to grow by 5.1%, indicating a readiness to invest in further enhancing service capabilities.

Employment and Capacity Utilization

Both sectors anticipate a modest rise in employment rates, projecting an increase of 0.8% in both manufacturing and services. Capacity utilization rates are also noteworthy, with manufacturing currently operating at 82.3% and services at 87.4%. These figures suggest that industries are gearing up for increased productivity.

Furthermore, executives forecast that prices paid for materials and services will rise as they budget for inflationary impacts across both sectors. Manufacturers predict an average increase of 3% in material costs, while service providers expect a slightly higher rise of 5.3%.

Optimism for 2025

In conclusion, the economic outlook for the upcoming year is overwhelmingly positive. Confidence levels among purchasing and supply management executives are reflected in their revenue expectations, investments, and hiring plans. The ISM report suggests a robust recovery and growth trend, positioning the U.S. economy for a favorable trajectory in 2025. With organizations prepared to navigate challenges, they remain focused on adapting to market demands while boosting operational efficiencies.

This forecast underlines the importance of strategic planning for both manufacturing and service sectors to capitalize on the anticipated growth in various industries. Therefore, a proactive approach will be crucial to harness this potential effectively.