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Manufacturing Economic Growth to Continue in Second Half of 1999 Continued

FOR RELEASE: May 25, 1999

CONTACT: Zenobia Daruwalla
  NAPM Media Relations
  602/752-6276 ext. 3015
   
Forecast Revenue Growth of 4.3%, Capacity Utilization 84.9%

(San Diego, California) — Economic growth will be higher in the second half of 1999, say the nation’s purchasing executives in their 57th Manufacturing Semiannual Economic Forecast. While 62% expect their 1999 revenues to be greater than in 1998, they expect a 4.3% net increase in revenues compared to a 5.2% increase predicted in December 1998.

OUTLOOK - NEXT 12 MONTHS

Members’ companies are more optimistic about the next 12 months than they were in December 1998. The 50% of members who are optimistic is significantly greater than the 40% who answered the same in December 1998. The 46% who are concerned is down from 53% in December 1998. The 4% of members who reported being worried or pessimistic is down from 7% reporting that outlook in December 1998.

Outlook - Next 12 Months

  Apr '96 Dec '96 May '97 Dec '97 May '98 Dec '98 May '99
               
Worried / Pessimistic 8% 5% 4% 1% 3% 7% 4%
Concerned 64% 49% 40% 40% 38% 53% 46%
Satisfied / Optimistic 28% 46% 56% 59% 59% 40% 50%
Diffusion Index 60% 70.5% 76% 79% 78% 66.5% 73%

SUMMARY

  • Operating Rate is currently 84.9% of normal capacity

  • Capital Spending to decrease 0.6% in 1999 over 1998

  • Production Capacity to increase 5.1% during 1999

  • Prices decreased 0.5% since end of 1998

  • Overall 1999 Prices to decrease 0.8%

  • Labor & Benefit Costs to increase at a 2.0% rate in 1999

  • Inventory-to-Sales Ratio expected to continue reduction in 1999

  • Manufacturing Employment to increase 0.1% during balance of 1999

  • Dollar expected to remain strong vs. major currencies

  • Exports to grow in 1999

  • Imports to grow in 1999

  • Manufacturing Revenues (nominal) to be up by 4.3% in 1999

  • Major concerns: The Economy, Inflation, Labor and Benefits Costs, Rising Interest Rates, and Material Shortages

  • Purchasers more optimistic about the next 12 months than they were in December 1998

  • Purchasers are concerned and have initiated plans to mitigate Y2K issues in their supply chain

In addition to the forecast, the Manufacturing NAPM Report on Business® is published monthly by the National Association of Purchasing Management, the largest purchasing and supply management research and education organization in the United States. NAPM is comprised of 181 affiliates with more than 44,000 members in the United States and Puerto Rico.

The full text version of the Manufacturing NAPM Report on Business® is posted on NAPM’s Web site at www.napm.org on the first business day of every month at 10:10 a.m. (EDT).

The next Manufacturing NAPM Report on Business® featuring the May 1999 data will be released at 10:00 a.m. (EDT) on June 1, 1999.

Back to previous page of 57th Manufacturing Semiannual Economic Forecast

Back to NAPM Reports on Business® main page



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