Manufacturers in the US are more optimistic about sales and spending this year than they were at the end of last year, while service providers were less upbeat, according to a semiannual survey by the Institute for Supply Management (ISM).
Purchasing managers at factories anticipate sales will grow 4.8 percent this year, up from the 4.6 percent they forecast in December last year, and business investment will rise 9.1 percent, more than the prior projection of 7.6 percent, the Tempe, Arizona-based group’s survey showed on Tuesday. By contrast, service providers estimate revenue growth of 3.5 percent this year, less than their December forecast of 4.3 percent, the ISM said.
“With 17 out of 18 industries within the manufacturing sector predicting growth in 2013 over 2012, US manufacturing continues to demonstrate its broad-based strength, efficiency and leadership in the world economy,” Bradley Holcomb, chairman of the group’s factory committee, said in a statement.
According to ISM’s survey, purchasing managers at service providers projected a 3.6 percent increase this year in capital spending, down from a 7 percent gain.
The outlook for employment was little changed compared with the December survey. Service providers still forecast a 1.3 percent increase in staff by the end of this year, the report showed. Manufacturers projected a 0.9 percent rise in employment, compared with a prior forecast of 0.8 percent.
The US economy grew at a 2.5 percent annualized rate in the first quarter, less than the median forecast of economists surveyed by Bloomberg and limited by a drop in defense outlays, figures showed last week. Recent reports indicate the economy is getting less of a boost from business investment as corporate spending on equipment and software grew at a 3 percent pace from January through March, after an 11.8 percent rate the prior quarter, according to the GDP report.