2006 Manufacturing Revenues Expected To Beat Previous Forecast

Although many economists expect growth of the overall U.S. economy to slow as the year progresses, a result of higher energy prices and higher interest rates, purchasing and supply management executives expect revenues in manufacturing to be better than previously expected.

The executives, surveyed by the Institute for Supply Management, now forecast a 6.6% increase in revenues for 2006, up 1.2% percentage points from the 5.4% increase they anticipated in a December 2005 survey. The forecast increases are not adjusted for inflation.

Seventy-two percent of the executives surveyed said revenues at their companies would be better in 2006 than in 2005, with increases, not adjusted for the effects of inflation, averaging 10.2% compared with 2005. Nine percent of the executives expected revenues to be lower in 2006 than in 2005, and the remaining 19% expected no revenue change at their companies between 2005 and 2006.

Manufacturing sectors expected to post at least a 5% year-over-year revenue increase are apparel; electronic components and equipment; glass, tone and aggregate; food; primary metals; instruments and photographic equipment; industrial and commercial equipment and computers; chemicals; transportation and equipment; and wood and wood products.

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