The nation’s purchasing and supply executives in the Institute of Supply Management’s latest report are now expecting overall manufacturing revenues to be essentially flat, a significant drop from their December forecast of a 4.2% increase for 2025.
Trade issues, continued inflation concerns, and geopolitical uncertainty are all headwinds for the rest of the year, according to the Spring 2025 ISM Supply Chain Planning Forecast.
Respondents were decidedly less optimistic now than they were just six months ago. Overall, they expect manufacturing revenue to increase only 0.1%, capital expenditures to decrease 1.3%, and capacity utilization to be 79.2%. The price of raw materials is expected to increase 7.5% and manufacturing employment is expected to decline slightly (-0.1%).
Only 8 of 18 manufacturing sectors are forecast to have revenue increases: Primary Metals; Miscellaneous Manufacturing; Computer & Electronic Products; Chemical Products; Electrical Equipment, Appliances & Components; Printing & Related Support Activities; Food, Beverage & Tobacco Products; and Transportation Equipment.
In the services industry, respondents now expect no change in overall 2025 revenues in the latest report, which is a drop from the 3.9% increase that was forecast back in December 2024. Capital expenditures are expected to decrease (-3.3%) and operating capacity levels are forecast to be 86.5% overall.
Just 9 of 18 service industry sectors are expecting to see revenue increases: Accommodation & Food Services; Arts, Entertainment & Recreation; Finance & Insurance; Information; Wholesale Trade; Transportation & Warehousing; Health Care & Social Assistance; Professional, Scientific & Technical Services; and Utilities.
