Manufacturers in U.S. ‘Optimistic’ About Growth in 2014

Sales will be stronger at U.S. manufacturers in 2014 after revenue this year fell short of projections, according to a survey by the Institute for Supply Management.

Purchasing managers at manufacturers estimate a 4.4 percent increase in sales in 2014. Revenue rose 3.4 percent this year. The group’s forecast in April showed purchasing managers projected a 4.8 percent advance in revenue for 2013.

“Manufacturing purchasing and supply executives expect to see continued growth in 2014,” Bradley Holcomb, chairman of the group’s factory committee, said in a statement. “They are optimistic about their overall business prospects for the first half of 2014, and are even more optimistic about the second half.”

For non-manufacturing industries, revenue climbed 4 percent this year, stronger than the 3.5 percent projection in April. Service industries forecast a 3.6 percent gain in sales next year.

Manufacturers also saw greater promise for adding staff, predicting a 2.4 percent increase by the end of 2014, while service providers projected employment will climb 2.1 percent.

“As confidence boosts, so does the ability and the appetite for adding labor,” Anthony Nieves, chairman of the group’s non-manufacturing committee, said on a conference call with reporters. “Companies have been doing more with less for quite some time.”

Service Industries

Service companies are more optimistic about 2014. Fifty-six percent of those surveyed have a “better outlook” on 2014, up from the 47 percent at the same time last year who had that view about 2013. For manufacturers, 44 percent see better business conditions next year, up from 42 percent for 2013.

Factory leaders expect input prices to rise 1.6 percent by the end of 2014 while service providers see a 1.9 percent increase, the ISM survey said.

Earlier this month, the ISM reported that manufacturing unexpectedly accelerated in November at the fastest pace in more than two years as export orders climbed on the global economic rebound. The ISM’s factory index jumped to 57.3 last month from 56.4 in October, figures indicated Dec. 2.

Two days after the factory gauge was released, the ISM services index showed a slower pace of growth in November. The group’s measure of non-manufacturing companies fell to 53.9 last month from 55.4 in October.

For both indexes, readings greater than 50 signal growth.

To contact the reporter on this story: Michelle Jamrisko in Washington at mjamrisko@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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