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Economic Growth Continues In 2014; Manufacturing Growth Expected in 2014; Revenue to Increase 4.4%; Capital Expenditures to Increase 8.0%; Capacity Utilization Currently at 80.3%; Non-Manufacturing Growth Projected in 2014; Revenue to Increase 3.6%;
Date:12/10/2013

normal capacity, higher than the 84.7 percent reported in April 2013. They are optimistic about continued growth in the first half of 2014 compared to the second half of 2013, and they have a higher level of optimism about the next 12 months than they had last December for 2013," said Nieves. "They forecast that their capacity to produce products and provide services will rise by 1.9 percent during 2014, and capital expenditures will increase by 4.6 percent from the 2013 levels. Non-manufacturers also predict their employment will increase by 2.1 percent during 2014."

Respondents in non-manufacturing industries expect the prices they pay for materials and services will increase by 1.9 percent during 2014. They also forecast their overall labor and benefit costs will increase 2.6 percent in 2014. Profit margins are reported to have decreased in the second and third quarters of 2013, and respondents expect them to increase between now and April 2014.

Survey respondents report that the most challenging problems facing their businesses as they plan for 2013 are: domestic sales growth (31.8%); government regulations (18.9%); healthcare cost (14.9%); healthcare reform uncertainty (14.9%); ongoing government shutdown and debt ceiling concerns (8.1%); inflation (6.1%); international sales growth (4.1%); and taxes (1.4%).

Survey respondents indicate that technology and process improvement is the most frequently cited means of improving supply chains in 2014. Other improvement approaches include: strategic cost and contract management; strategic sourcing; supplier relationship management; and professional development.

OPERATING RATEManufacturing
Manufacturing purchasing and supply executives report their companies are currently operating at 80.3 percent of normal capacity. This is a slight increase when compared to April 2013 (80.2 percent), and a significant increase when compared to December 2012 (77.5 percent). The November data from th
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SOURCE Institute for Supply Management
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