2011 Looking Good with Revenue Growth of 5.6%

ISM survey also reports capital expenditure will grow 14.5% next year

Economic growth in the United States will continue in 2011, according to a report released on Dec. 7 by the Institute for Supply Management. Expectations are for a continuation of the economic recovery that began in mid-2009 with business investment increasing substantially.

"They forecast that their capacity to produce products and provide services will rise by 2% during 2011, and capital expenditures will increase by 3.7% from the 2010 level," says Norbert J. Ore, economist, ISM.

Expectations for 2011 are positive as 65% of survey respondents expect revenues to be greater in 2011 than in 2010. The panel of purchasing and supply executives expects a 5.6% net increase in overall revenues for 2011, compared to a 7.9% increase reported for 2010.

Highlights from the report:

  • Respondents report operating at 80.2% of their normal capacity, up from 72.8% reported in April 2010.
  • Capital expenditures will increase by 14.5% in 2011, compared to a 5.9% increase reported for 2010.
  • Survey respondents also forecast that they will reduce inventories in an effort to improve their purchased inventory-to-sales ratio in 2011.
  • Employment in the sector will increase by 1.8%, while labor and benefits costs are expected to increase an average of 1.9% in 2011.
  • Manufacturing purchasers are predicting strength in exports and imports in 2011. They also expect the U.S. dollar to weaken on average against the currencies of major trading partners.
  • The panel also predicts the prices they pay will increase 2.7% during the first four months of 2011, and will increase an additional 1.3% during the balance of the year, with an overall increase of 4% for 2011.

Survey respondents expect to realize supply chain improvements through improved inventory/asset management; cost reduction; supplier development/better metrics; supplier consolidation; and better risk management.

To view the full report visit http://www.businesswire.com/news/home/20101207005352/en

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