ISM Reports Economic Downturn to Continue thru 2020
The economic downturn in the U.S. will continue for the rest of 2020, say the nation’s purchasing and supply executives in the Spring 2020 Semiannual Economic Forecast.
Expectations for the remainder for 2020 have been clouded by the coronavirus (COVID-19) pandemic; both manufacturing and non-manufacturing sectors are signaling contraction.
These projections are part of the forecast issued by the Institute for Supply Management® (ISM®) Business Survey Committees. The forecast was presented today by Timothy R. Fiore, CPSM, C.P.M., Chair of the ISM Manufacturing Business Survey Committee, and Anthony S. Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the ISM Non-Manufacturing Business Survey Committee.
Revenue for 2020 is expected to decrease, on average, 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 increase 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 operating rate at 75.9 percent, an expected 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 negatively impacted by the coronavirus pandemic. “With 15 of the 18 manufacturing sector industries — including five of the six big industry sectors — predicting revenue declines for 2020, panelists forecast that recovery will likely not occur until near the end of the year. The sectors’ responses were consistent with the industry-performance reports in April’s Report On Business®,” says Fiore.
The two industries reporting expectations of growth in revenue for 2020 are: Apparel, Leather & Allied Products; and Food, Beverage & Tobacco Products. The 15 manufacturing industries expecting decreases in revenue in 2020 — listed in order — are: Printing & Related Support Activities; Petroleum & Coal Products; Transportation Equipment; Miscellaneous Manufacturing; Primary Metals; Plastics & Rubber Products; Machinery; Furniture & Related Products; Textile Mills; Nonmetallic Mineral Products; Fabricated Metal Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Chemical Products; and Paper Products.