Manufacturing to grow in 2011: ISM

TEMPE, ARIZ.: Manufacturing will see higher revenues and costs in the coming year, according to the Institute for Supply Management, a global association for the supply management industry.

It forecasts revenues in the manufacturing sector will grow 5.6 per cent in 2011.

Respondents are already operating at 80.2 per cent of their normal capacity, up from 72.8 per cent in April 2010.

Some industries, such as chemical, beverage and tobacco, paper, plastics and rubber, are operating above that average.

Manufacturing is now in its sixteenth consecutive month of growth.

Norbert Ore, chair of the ISM Manufacturing Business Survey Committee, says purchasing and supply executives are optimistic, especially about the latter part of 2011.

“While 2010 has been a year of recovery in manufacturing, our forecast sees improvements in both investment and employment,” Ore says.

The survey found 65 per cent anticipate higher revenues in 2011 than in 2010.

In the new year, respondents expect capital expenditures will go up by 14.5 per cent — more than double the 5.9 per cent increase reported for 2010.

Alongside a 1.8 per cent employment growth, labor and benefits costs will rise 1.9 per cent.

Respondents also expect the prices they pay will increase a total four per cent over the next year, mostly during the first four months.

They anticipate overall supply chain improvements through cost reduction, enhanced inventory management, supplier development and consolidation, and better risk management.

Of the 85 per cent who export, 60 per cent predict an increase in new export orders over the first half of next year.

Imports will also go up, according to 48 per cent of the 91 per cent who import, with increases expected in industries such as nonmetallic mineral products, apparel, leather and allied products, and petroleum and coal products.

The survey says 16 of 18 industries will see revenues rise in 2011, including:

• Primary metals
• Fabricated metal products
• Machinery
• Petroleum and coal products
• Plastics and rubber products
• Apparel
• Textile mills
• Leather and allied products
• Wood products
• Transportation equipment
• Beverage and tobacco products
• Electrical equipment
• Miscellaneous manufacturing
• Food
• Furniture and related products
• Chemical products
• Appliances and components
• Printing and related support activities
• Paper products