US economy to recover for rest of 2021; manufacturing to expand: ISM

The economic recovery in the US will continue for the rest of 2021, as per a recent report. Expectations for the remainder for 2021 have strengthened, compared to December 2020, as there is hope that a corner has been turned on the pandemic. The manufacturing sector is also signalling expansion as revenue for 2021 is expected to increase by 7.2 per cent.

The average expected revenue growth of 7.2 per cent for 2021 is 0.3 percentage point higher than the December 2020 forecast of 6.9 percent, and 8.5 percentage points higher than the 1.3-per cent decrease reported for 2020 over 2019, said the US’ purchasing and supply executives in the Spring 2021 Semiannual Economic Forecast. The projections are part of the forecast issued by the Institute for Supply Management (ISM) business survey committees.

In the survey, 59 per cent of respondents said that revenues for 2021 will increase, on average, 13.8 per cent over 2020. Only 8 per cent said that the revenues will decrease, on average, 13 per cent, and 33 per cent indicate no change.

The total production capacity in the US is expected to increase 6.6 percent in 2021, the report said. With operating rate at 88.3 per cent, an expected capital-expenditures increase of 8.7 per cent, an expected increase of 8.1 per cent in prices paid for raw materials, and an expected employment increase by 2.8 per cent by the end of 2021, manufacturing continues its comeback from the turmoil of 2020.

“With all 18 manufacturing-sector industries predicting revenue growth in 2021, panellists forecast that recovery will continue the rest of the year. The sectors’ responses were consistent with the industry-performance reports in the April 2021 Report On Business,” said Timothy R Fiore, chair of the ISM manufacturing business survey committee.

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