ISM Forecast: Economy to Softly Expand in 2024

The U.S. economy will continue to softly expand for the rest of 2024, say the nation’s purchasing and supply executives in the Spring 2024 Semiannual Economic Forecast. Expectations for the remainder of 2024 are similar to those expressed in December 2023, despite continued inflation concerns and geopolitical uncertainty.

These projections are part of the forecast issued by the Institute for Supply Management (ISM) Business Survey Committees. The forecast was presented today by Timothy R. Fiore, CPSM, C.P.M., Chair of the ISM Manufacturing Business Survey Committee, and Anthony S. Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the ISM Services Business Survey Committee.

Manufacturing Summary

Revenue for 2024 is expected to increase, on average, by 2.1%. This is 3.5 percentage points lower than the December 2023 forecast of 5.6%, and 1.2 percentage points higher than the 0.9-percentage point year-over-year increase reported for 2023. Forty-four percent of respondents say that revenues for 2024 will increase, on average, 8.6% compared to 2023. Fourteen percent say revenues will decrease (12.3%, on average), and 42% indicate no change. With an operating rate of 82.8% and projected increases in capital expenditures (1%), prices paid for raw materials (1.9%) and employment (0.3%) by the end of 2024, the manufacturing sector continues its comeback from the turmoil that began in 2020. “With 12 manufacturing industries expecting revenue growth in 2024 and nine industries expecting employment growth in 2024, panelists forecast that recovery will continue the rest of the year, albeit somewhat softer than originally expected. Sentiment in each industry was generally consistent with performance reports in the April 2024 Manufacturing ISM® Report On Business®, as well as the fall Semiannual Economic Forecast conducted in December,” says Fiore.

Twelve of 18 industries report projected revenue increases for the rest of 2024, listed in order: Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Transportation Equipment; Computer & Electronic Products; Chemical Products; Nonmetallic Mineral Products; Primary Metals; Textile Mills; Furniture & Related Products; Fabricated Metal Products; Electrical Equipment, Appliances & Components; and Paper Products.

Services Summary

Respondents expect a 2.9-percent net increase in overall revenues, which is 4 percentage points lower than the 6.9-percent increase forecast in December 2023. Thirty-six percent of respondents say that revenues for 2024 will increase, on average, 10.3% compared to 2023. Meanwhile, 10% expect their revenues to decrease (7.5%, on average), and 54% indicate no change. “The services sector will continue to grow for the rest of 2024. Services companies are currently operating at 88.6% of normal capacity. Supply managers indicate that prices are expected to increase 3.2% over the year, reflecting increasing inflation. Employment is projected to increase 0.8%. Thirteen industries forecast increased revenues, down from the 16 industries that predicted increases in December 2023,” says Nieves.

Thirteen of 18 industries expect revenue increases in 2024, listed in order: Retail Trade; Mining; Transportation & Warehousing; Other Services; Management of Companies & Support Services; Accommodation & Food Services; Professional, Scientific & Technical Services; Construction; Wholesale Trade; Public Administration; Utilities; Information; and Finance & Insurance.



Purchasing and supply executives report that their companies are operating, on average, at 82.8% of normal capacity, 0.2 percentage point lower than the figure reported in December 2023. The 10 industries reporting operating capacity levels above the average rate of 82.8% — listed in order — are: Paper Products; Textile Mills; Petroleum & Coal Products; Transportation Equipment; Computer & Electronic Products; Wood Products; Machinery; Primary Metals; Food, Beverage & Tobacco Products; and Fabricated Metal Products.


Organizations are operating, on average, at 88.6% of normal capacity, according to Business Survey Committee respondents. This is 2.1 percentage points higher compared to December 2023. The eight industries operating at capacity levels above the average rate of 88.6% — listed in order — are: Educational Services; Other Services; Finance & Insurance; Retail Trade; Utilities; Agriculture, Forestry, Fishing & Hunting; Construction; and Public Administration.

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