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The Semiannual Economic Forecast PowerPoint Presentation
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The Semiannual Economic Forecast

The Semiannual Economic Forecast

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The Semiannual Economic Forecast

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  1. The Semiannual Economic Forecast April 30, 2013 ISM Business Survey Committees

  2. Agenda • Bradley J. Holcomb, CPSM, CPSD Manufacturing Semiannual Forecast • Anthony S. Nieves, C.P.M., CFPM Non-Manufacturing Semiannual Forecast • Bernard Baumohl, The Economic Outlook Group • Q & A

  3. Dr. John H. Hoagland (December 22, 1919 – March 6, 2013) • BA from Oberlin College, MBA from Harvard University, PhD from the Ohio State University • Purchasing Professor at Michigan State University’s Broad College of Business from 1952 through his retirement in 1990 • Co-founder of the Purchasing and Supply Management Executive Seminar at MSU • Awarded an NAPM Professorship • ISM J. Shipman Gold Medal Award recipient

  4. Dr. John H. Hoagland (December 22, 1919 – March 6, 2013) • Paul Harris Fellow from Rotary International • Robert Angell Award honoree from NAPM of Central Michigan • Honorary Alumni Award winner from MSU Alumni Association • Hoagland-Metzler Endowed Chair in Purchasing and Supply Management at MSU • ISM John H. Hoagland Award for Distinguished Service by Academics & Practitioners created to honor Dr. Hoagland

  5. Dr. John H. Hoagland (December 22, 1919 – March 6, 2013) • Passionately championed the advancement and recognition of the ISM Report On Business® and the PMI

  6. The Report On Business® • Surveying manufacturing since 1931 • Approximately 350 respondents • 18 NAICS categories • Weighted by contribution to GDP • Non-manufacturing started in June 1998 • Approximately 350 respondents • 18 NAICS categories • Weighted by contribution to GDP

  7. Percent of Normal Capacity April 2013 80.2% December 2012 77.5% April 2012 81.6 % Manufacturing Semiannual ForecastCurrent Operating Rate Manufacturing

  8. Production Capacity Change Reported for 2012 April 2013 + 6.7% December 2012 + 6.8% Production Capacity Mfg December 2012 + 1.3% Predicted for 2013 Production Capacity Mfg

  9. Capital Expenditures Predicted2013 vs. 2012 Capital Expenditures Mfg April 2013+ 9.1% December 2012 + 7.6%

  10. Purchase Price Changes Reported April 2013 vs. End 2012 Price Changes Mfg April 2013+ 1.4% Predicted End 2013 vs. End 2012 Price ChangesMfg April 2013 + 2.3%

  11. Predicted Employment Change Predicted End 2013 vs. April 2013 Employment Changes Mfg April 2013+ 0.9% Predicted End 2013 vs. End 2012 Employment Changes Mfg December 2012+ 0.8%

  12. Business Revenues (nominal) Predicted 2013 vs. 2012 Business Revenues Mfg April 2013+ 4.8% December 2012+ 4.6%

  13. Predicted Increase in Business Revenues by Industry Manufacturing 1. Wood Products 2. Furniture & Related Products 3. Nonmetallic Mineral Products 4. Petroleum & Coal Products 5. Electrical Equipment, Appliances & Components 2013 vs. 2012

  14. PMI 2005 – March 2013

  15. PMI Annual AverageRelative to Midpoint of 50 2012 Average: 51.7% 2013 Average (through March): 52.9%

  16. Percent of Normal Capacity April 2013 84.7% December 2012 85.4% April 2012 85.2% Non-Manufacturing Semiannual ForecastCurrent Operating Rate Non-Manufacturing

  17. Production Capacity Change Reported for 2012 April 2013 + 2.3% December 2012 + 3.4% Production Capacity Non-Mfg December 2012+ 3.2% Predicted for 2013 Production Capacity Non-Mfg

  18. Capital Expenditures Predicted2013 vs. 2012 Capital Expenditures Non-Mfg April 2013 + 3.6% December 2012 + 7.0%

  19. Purchase Price Changes Reported April 2013 vs. End 2012 Price Changes Non-Mfg April 2013 + 1.9% Predicted End 2013 vs. End 2012 Price Changes Non-Mfg April 2013+ 2.4%

  20. Predicted Employment Change Predicted End 2013 vs. April 2013 Employment Changes Non-Mfg April 2013+ 1.3% Predicted End 2013 vs. End 2012 Employment ChangesNon-Mfg December 2012+ 1.3%

  21. Business Revenues (nominal) Predicted 2013 vs. 2012 Business Revenues Non-Mfg April 2013+ 3.5% December 2012 + 4.3%

  22. Predicted Increase in Business Revenues by Industry Non-Manufacturing 1. Construction 2. Transportation & Warehousing 3. Retail Trade 4. Professional, Scientific & Technical Services 5. Other Services 2013 vs. 2012

  23. NMI January 2008 – March 2013

  24. Comparison of PMI and NMI January 2008 – March 2013

  25. NMI Annual AverageAnnual Average Relative to Midpoint of 50 2012 Average: 54.6% 2013 Average (through March): 55.2%

  26. Non-Manufacturing Business Activity IndexAnnual Average Relative to Midpoint of 50 2012 Average: 57.7% 2013 Average (through March): 56.6%

  27. Manufacturing SectorSummary • Operating rate is currently 80.2% of normal capacity. • Production capacity is expected to increase 6.7% in 2013. • Capital expenditures are expected to increase 9.1% in 2013. • Prices paid increased 1.4% through the end of April 2013. • Prices are expected to increase a total of 2.3% for all of 2013, indicating an expected increase in prices of 0.9% for the remainder of the year.

  28. Manufacturing SectorSummary (continued) • Manufacturing employment is expected to increase 0.9% during the remainder of 2013. • Manufacturing revenues are expected to increase 4.8% in 2013. • Overall, manufacturing is expected to continue growing in 2013.

  29. Non-Manufacturing SectorSummary • Operating rate is currently 84.7% of normal capacity. • Production capacity is expected to increase 2.3% in 2013. • Capital expenditures are expected to increase 3.6% in 2013. • Prices paid increased 1.9% through the end of April 2013. • Prices are expected to increase an additional 0.5% over the remainder of the year, for a total 2013 increase of 2.4%.

  30. Non-Manufacturing SectorSummary (continued) • Non-manufacturing employment is expected to increase 1.3% during the balance of 2013. • Non-manufacturing revenues are expected to increase 3.5% in 2013. • The non-manufacturing sector is projected to maintain the course of sustainable growth in 2013.

  31. Bernard Baumohl, Chief Global Economist atThe Economic Outlook Group