1 2012 Semiannual Forecast Report December 11, 2012 ISM Business Survey Committees.
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Transcript of 1 2012 Semiannual Forecast Report December 11, 2012 ISM Business Survey Committees.
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2012 Semiannual 2012 Semiannual Forecast ReportForecast Report
December 11, 2012ISM Business Survey Committees
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Speakers
Bradley J. Holcomb, CPSM, CPSD, chair of the ISM Manufacturing Business Survey Committee
Anthony S. Nieves, C.P.M., CFPM, chair of the ISM Non-Manufacturing Business Survey Committee
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PMI 2004 – November 2012
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NMI 2008 - November 2012
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Non-Manufacturing Business Activity 2004 – November 2012
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Current Operating Rate
Percent of Normal Capacity
December 2012 77.5%April 2012 81.6%December 2011 79.2%
December 2012 85.4%April 2012 85.2%December 2011 85.2%
ManufacturingManufacturing
Non-ManufacturingNon-Manufacturing
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Production Capacity ChangeReported 2012 vs. 2011
Production Capacity Dec 2012
Mfg Non-Mfg+ 1.3%+ 3.2%
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Production Capacity:Manufacturing
Principal Means of Achieving Increases in 2012: Additional personnel (permanent, temporary
or contract) More hours worked with existing personnel Additional plant and/or equipment Replaced equipment with technically
advanced equipment
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Additional personnel (permanent, temporary or contract)
More hours worked with existing personnel Additional plant and/or equipment Replaced equipment with technically
advanced equipment
Production Capacity: Non-Manufacturing
Principal Means of Achieving Increases in 2012:
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Production Capacity ChangePredicted For 2013
Predicted Production Capacity
Mfg Non-Mfg+ 6.8% + 3.4%
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Capital Expenditures
Mfg Non-Mfg
+ 3.7% + 9.4%
Mfg Non-Mfg
+ 7.6% + 7.0%
Actual
2012 vs. 2011
Predicted
2013 vs. 2012
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Price Changes Mfg Non-Mfg
Dec 2012 + 0.8% + 2.7%
Reported Purchase Price Changes
End 2012 vs. End 2011
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Mfg Non-Mfg
April 2013 vs. End 2012 + 2.1% + 2.3%
End 2013 vs. End 2012 + 2.8% + 2.7%
December 2012
Predicted Purchase Price Changes
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Predicted Labor and Benefit Costs
Labor & Benefit Costs Mfg Non-Mfg
Dec 2012 + 1.7% + 1.9%
2013 vs. 2012
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Predicted Employment Change
Overall Employment Mfg Non-Mfg
Dec 2012 + 0.8% + 1.3%
End 2013 vs. End 2012
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16Note: 81.4% of Manufacturing respondents export
Exports: Predicted Change FirstHalf 2013
ManufacturingManufacturing
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17Note: 22% of Non-Manufacturing respondents export
Non-ManufacturingNon-Manufacturing
Exports: Predicted Change First Half 2013
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18Note: 85% of Manufacturing respondents import
ManufacturingManufacturing
Imports: Predicted Change First Half 2013
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19Note: 45.4% of Non-Manufacturing respondents import
Non-ManufacturingNon-Manufacturing
Imports: Predicted Change First Half 2013
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Business Revenues (nominal)
Mfg Non-Mfg
Reported 2012 vs. 2011 + 4.0% + 3.4%
Predicted 2013 vs. 2012 + 4.6% + 4.3%
December 2012
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Industries Predicting Growth in Revenues
2013 vs. 2012 — Manufacturing Primary MetalsPrimary Metals Petroleum & Coal ProductsPetroleum & Coal Products Computer & Electronic Computer & Electronic
ProductsProducts Wood ProductsWood Products Furniture & Related ProductsFurniture & Related Products Printing & Related Support Printing & Related Support
ActivitiesActivities Food, Beverage & Tobacco Food, Beverage & Tobacco
ProductsProducts Paper ProductsPaper Products
Chemical ProductsChemical Products Plastics & Rubber ProductsPlastics & Rubber Products Apparel, Leather & Allied Apparel, Leather & Allied
ProductsProducts Miscellaneous ManufacturingMiscellaneous Manufacturing Transportation EquipmentTransportation Equipment MachineryMachinery Nonmetallic Mineral ProductsNonmetallic Mineral Products Electrical Equipment, Electrical Equipment,
Appliances & ComponentsAppliances & Components Fabricated Metal ProductsFabricated Metal Products
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Industries Predicting Growth in Revenues
2013 vs. 2012 — Non-Manufacturing ConstructionConstruction Professional, Scientific & Professional, Scientific &
Technical ServicesTechnical Services Other ServicesOther Services Management of Companies Management of Companies
& Support Services& Support Services Real Estate, Rental & Real Estate, Rental &
LeasingLeasing Wholesale TradeWholesale Trade Retail TradeRetail Trade
Transportation & Transportation & WarehousingWarehousing
Accommodation & Food Accommodation & Food ServicesServices
Arts, Entertainment & Arts, Entertainment & RecreationRecreation
Finance & InsuranceFinance & Insurance InformationInformation Public AdministrationPublic Administration Health Care & Social Health Care & Social
AssistanceAssistance
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Mfg Non-Mfg
Better 40% 43%
Same 38% 41%
Worse 22% 16%
Diffusion Index 59% 63.5%
First Half 2013 vs. Last Half 2012
Business in 2013
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Second Half 2013 vs. First Half 2013
Mfg Non-Mfg
Better 46% 42% Same 44% 48% Worse 10% 10% Diffusion Index 68% 66%
Business in 2013
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Most Important Issues Facing Business
ManufacturingManufacturing Poor sales (37.8%) Government regulations (30.5%) Inflation (9.8%) Taxes (9.1%) Quality of labor (4.9%) Interest rates and finance (4.3%) Cost of labor (3.7%)
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Most Important Issues Facing Business
Non-ManufacturingNon-Manufacturing Government regulations (35.4%) Poor sales (22.2%) Cost of labor (10.4%) Inflation (9%) Interest rates and finance (9%) Taxes (7.6%) Quality of labor (6.3%)
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Manufacturing Most Cited ApproachesManufacturing Most Cited Approaches
Strategic sourcing/supply base rationalization
Inventory management and control
Process and information systems improvements
Supplier performance management
Demand planning to reduce supply lead times
Supply Chain Improvements 2013
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Non-Manufacturing Most Cited Non-Manufacturing Most Cited ApproachesApproaches
Strategic cost management
Process improvement
Strategic sourcing
Supplier relationship management
Professional development
Supply Chain Improvements 2013
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Change for 2013 vs. 2012
Mfg Non-Mfg
Expect to Increase 19% 12%
Expect No Change 60% 79%
Expect to Decrease 21% 9%
Diffusion Index 49% 51.5%
Predicted Inventory-to-Sales Ratio
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Business Outlook Next 12 Months
Mfg Non-Mfg
Better 42% 47%
Same 38% 31%
Worse 20% 22%
Diffusion Index 61% 62.5%
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Strength of the U.S. Dollar for 2013
ManufacturingManufacturing
Dec 2013 53.3%
Dec 2012 49.2%
Average Diffusion Index for U.S. Dollar vs. 7 Major CurrenciesAverage Diffusion Index for U.S. Dollar vs. 7 Major Currencies
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Reported Profit MarginsApr 2012 – Nov 2012
Mfg Non-Mfg
Better 34% 21%
Same 40% 44%
Worse 26% 35%
Diffusion Index 54% 43%
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Predicted Profit MarginsNov 2012 – Apr 2013
Mfg Non-Mfg
Better 28% 28%
Same 50% 53%
Worse 22% 19%
Diffusion Index 53% 54.5%
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Summary Manufacturing
Operating rate is currently at 77.5%. Production capacity increased by 1.3% in
2012. Production capacity is expected to increase
by 6.8% in 2013. Capital expenditures increased 3.7% in 2012. Capital expenditures are expected to
increase 7.6% in 2013.
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Prices paid increased 0.8% in 2012. Overall 2013 prices paid are expected to
increase 2.8%. Labor and benefit costs are expected to
increase 1.7% in 2013. Manufacturing employment is expected to
increase 0.8% in 2013. Expect growth in U.S. exports in 2013. Expect growth in U.S. imports in 2013.
Summary Manufacturingcontinued
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Manufacturing revenues (nominal) are up 4% in 2012.
Manufacturing revenues (nominal) are expected to increase 4.6% in 2013.
The U.S. dollar is expected to strengthen on average versus major trading partner currencies in 2013.
Overall attitude of manufacturing supply managers: optimistic, with 80% of respondents predicting 2013 will be the same as or better than 2012.
Summary Manufacturingcontinued
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Summary Non-Manufacturing
Operating rate is currently at 85.4%.
Production capacity increased 3.2% in 2012.
Production and provision capacity is expected to increase 3.4% in 2013.
Capital expenditures increased 9.4% in 2012.
Capital expenditures are expected to increase 7% in 2013.
Prices paid increased 2.7% in 2012.
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Prices paid are expected to increase 2.7% in 2013.
Labor and benefit costs are expected to increase 1.9% in 2013.
Non-manufacturing employment is expected to increase 1.3% in 2013.
Expect export levels to increase in 2013.
Expect import growth in 2013.
Summary Non-Manufacturing continued
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Summary Non-Manufacturing continued
Non-manufacturing revenues (nominal) are up 3.4% in 2012.
Non-manufacturing revenues (nominal) are expected to rise 4.3% in 2013.
Overall attitude of non-manufacturing supply managers: mostly positive outlook, with 78% of respondents predicting 2013 will be the same as or better than 2012.
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Questions