Manufacturers across most industries are expecting revenue growth in the new year, according to a nationwide survey conducted by the Institute for Supply Management (ISM).

Based on results of the November survey, manufacturing’s purchasing and supply executives expect to see overall growth in 2024, and are optimistic about business prospects for both the first and second half of the year.

The survey found that purchasing and supply executives believe that in 2024:

• Revenue is expected to increase in 15 of 18 manufacturing industries, and in 16 of 18 services-sector industries.
• There will be a 5.6% net increase in overall revenues for 2024, compared with a 0.9% increase reported for 2023.

Manufacturing survey respondents reported their companies are operating at 83% of normal capacity, up one percentage point from the 82% reported in May 2023, according to ISM.

Cost of Growth

• Capital Expenditure: Purchasing and supply executives predict that capital expenditures will increase year over year by 11.9% in 2024, compared to the reported 14.9% increase from 2022 to 2023.
• Labor: Manufacturers expect employment to grow by 2% in 2024 relative to current levels, while labor and benefit costs are expected to increase an average of 5.2%. The three industries projected to outpace the average: Plastics & Rubber Products; Transportation Equipment; and Primary Metals.
• Raw Materials: ISM predicts that prices paid for raw materials will increase 3.2% during the first five months of the year, with an overall increase of 3.3% for 2024. This compares to a reported 4.1% increase in raw materials prices in 2023.

Meanwhile, ISM’s Purchasing Managers Index — considered a barometer for the health of U.S. manufacturing — has been in contraction territory for 13 consecutive months, the longest such slump since the dot-com bubble burst in early 2000.