ISM: Economic Downturn To Continue Through 2020
Revenue for 2020 is expected to decrease, on aver- age, by 10.3 percent. This is 15.1 percentage points lower than the 4.8 percent increase forecast in December 2019 for all of 2020, and 12.2 percentage points lower than the 1.9 percent increase reported for 2019 over 2018. Eighteen percent of respondents say that revenues for 2020 will in- crease 10.6 percent, on average, over 2019. Conversely, 58 percent say their revenues will decrease, on average, 21.2 percent, and the remaining 24 percent indicate no change. With the operating rate at 75.9 percent, an ex- pected capital expenditure decrease of 19.1 percent, an expected decrease of 1.6 percent for prices paid for raw materials, and employment expected to decrease by 5.3 percent by the end of 2020, manufacturing has been neg- atively impacted by the coronavirus pandemic. “With 15 of the 18 manufacturing sector industries — including five of the six big industry sectors — predicting revenue de- clines for 2020, panelists forecast that recovery will likely
The economic downturn in the U.S. will continue for the rest of 2020, say the nation’s purchasing and supply ex- ecutives in the Spring 2020 Semiannual Economic Fore- cast. Expectations for the remainder for 2020 have been clouded by the coronavirus (COVID-19) pandemic; both manufacturing and non-manufacturing sectors are signal- ing contraction. These projections are part of the forecast issued by the Institute for Supply Management (ISM) Business Sur- vey Committees. The forecast was presented last week by Timothy R. Fiore, CPSM, C.P.M., Chair of the ISM Man- ufacturing Business Survey Committee, and Anthony S. Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the ISM Non-Manufacturing Business Survey Committee.
not occur until near the end of the year. The sectors’ responses were consistent with the industry-performance reports in April’s Re- port On Business,” says Fiore. The two industries reporting expecta- tions of growth in revenue for 2020 are: Ap- parel, Leather & Allied Products; and Food, Beverage & Tobacco Products. The 15 man- ufacturing industries expecting decreases in revenue in 2020 — listed in order — are: Printing & Related Support Activities; Pe- troleum & Coal Products; Transportation Equipment; Miscellaneous Manufacturing; Primary Metals; Plastics & Rubber Products; Machinery; Furniture & Related Products; Textile Mills; Nonmetallic Mineral Products; Fabricated Metal Products; Electrical Equip- ment, Appliances & Components; Comput- er & Electronic Products; Chemical Prod- ucts; and Paper Products. Purchasing and supply managers report that their companies are currently operat- ing, on average, at 75.9 percent of normal capacity, 7.8 percentage points less than was reported in December 2019. Production capacity in manufacturing is expected to decrease 3.6 percent in 2020. This compares to an increase of 3.1 percent reported for 2019, and a prediction in De- cember 2019 for an increase of 3.3 percent for 2020. Survey respondents expect a 19.1 per- cent decrease in capital expenditures in 2020. This is lower than the 2.1 percent decrease predicted by the panel in the De- cember 2019 forecast for 2020. Current- ly, 10 percent of respondents predict in- creased capital expenditures in 2020, with
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May 25, 2020
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