2019 Manufacturing Forecast
The Institute for Supply Management (ISM) has released its economic forecast for the manufacturing industry in 2019. Although a slowdown is expected when compared to 2018, the institute still believes there will be significant growth. In fact, the forecast predicts that 17 different manufacturing sectors will see increased revenues in 2019.
Here are some other key findings from the forecast:
- Revenue is expected to increase by 5.7 percent.
- Exports should slow down significantly amid the strength of the U.S. dollar and ongoing trade disputes.
- The price of raw materials will increase by 3.3 percent.
- Manufacturers are currently operating at 85.2 percent capacity, on average.
- Capital expenditures will increase by 6 percent over last year, compared to a 13.4 percent increase from 2017 to 2018.
- Employment will grow by 2.4 percent. Also, 77.9 percent of manufacturers said they had difficulty hiring workers to fill open positions in December 2018.
- Tariffs are leading 65.2 percent of businesses to evaluate new sources of supplies and change their existing manufacturing footprints.
Recent Investments in U.S. Manufacturing
The U.S. manufacturing industry is a vital part of the economy, as its $2.1 trillion value would make it the ninth largest economy in the world. And, as the Trump administration has pushed to increase the amount of manufacturing facilities in the United States, many foreign and domestic organizations have made large investments in the industry. Here’s an overview of some recently announced investments in U.S. manufacturing:
- Fiat Chrysler Automobiles will invest $4.5 billion to create 6,500 new jobs.
- Mazda Motor Corporation will spend $1.5 billion to build its first U.S. production facility since 2012.
- Electronics manufacturer Foxconn moved up production on a Wisconsin-based facility to open in 2020.
- Toyota Motor Corporation will increase its three-year, $10 billion investment in U.S. manufacturing to $13 billion.
While it may seem like large corporations could push small or mid-sized businesses out of the market, investments in manufacturing can have substantial benefits for all organizations.
Lawmakers are encouraged to focus on the industry’s wants and needs. Demand for domestic products increases as prices start to match those of cheaper foreign goods. Skilled employees are more likely to enter the workforce.