Economic activity in the United States is expected to remain flat through the remainder of 2025, according to purchasing and supply executives surveyed by the Institute for Supply Management (ISM).

Released on Thursday, the ISM Spring 2025 Supply Chain Planning Forecast — formerly known as the Semiannual Economic Forecast — shows a decline in expectations from December 2024, with ongoing trade issues, inflation, and geopolitical instability weighing heavily on growth projections.

In the manufacturing sector, revenues are forecast to increase by just 0.1%, while capital expenditures are expected to decline by 1.3%. Capacity utilization stands at 79.2%, and employment is projected to dip slightly by 0.1%. Prices for raw materials are anticipated to rise 7.5% year-over-year, following a 4.7% increase through April.

“The manufacturing sector will be flat or grow slightly at best,” said Timothy R. Fiore, chair of ISM’s Manufacturing Business Survey Committee.

For the services sector, the outlook is similarly subdued. Revenues are expected to remain unchanged from 2024, while capital spending is forecast to decline by 3.3%. Capacity utilization is reported at 86.5%, with employment projected to decrease by 1.6%. Prices are also expected to rise 7.3% for the year.

“The services sector is projected to be flat through 2025,” said Steve Miller, chair of ISM’s Services Business Survey Committee. “Companies continue to face inflationary pressures while demand remains stable.”

The forecast is based on input from ISM’s Business Survey Committees for both manufacturing and services, drawing from purchasing and supply management professionals across multiple industries.

Among notable responses, a majority of manufacturers and service providers indicated they are adjusting pricing in response to tariffs, with many planning to pass at least some of the cost on to customers. A smaller share are considering reshoring production or seeking alternative trade partners.

The ISM forecast is a widely watched indicator of near-term business conditions in the United States, used by business leaders and policymakers to assess economic momentum and risks.