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The Semiannual Economic Forecast

The Semiannual Economic Forecast. May 8, 2012 ISM Business Survey Committees. Agenda. Bradley J. Holcomb, CPSM, CPSD Manufacturing Semiannual Forecast Anthony S. Nieves, C.P.M., CFPM Non-Manufacturing Semiannual Forecast

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The Semiannual Economic Forecast

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  1. The Semiannual Economic Forecast May 8, 2012 ISM Business Survey Committees

  2. Agenda • Bradley J. Holcomb, CPSM, CPSD Manufacturing Semiannual Forecast • Anthony S. Nieves, C.P.M., CFPM Non-Manufacturing Semiannual Forecast • Dr. Ray Perryman, The Perryman Group • Q & A

  3. The Report On Business® • Surveying manufacturing since 1931 • Approximately 350 respondents • 18 NAICS categories • Weighted by contribution to GDP • Non-manufacturing started in June 1998 • Approximately 350 respondents • 18 NAICS categories • Weighted by contribution to GDP

  4. Global PMI

  5. Percent of Normal Capacity April 2012 81.6% December 2011 79.2% April 2011 83.2 % Manufacturing Semiannual ForecastCurrent Operating Rate Manufacturing

  6. Production Capacity Change Reported for 2011 April 2012 + 5.2% December 2011 + 5.6% Production Capacity Mfg December 2011 +4.6% Predicted for 2012 Production Capacity Mfg

  7. Capital Expenditures Predicted2012 vs. 2011 Capital Expenditures Mfg April 2012+6.2% December 2011 + 1.9%

  8. Purchase Price Changes Reported April 2012 vs. End 2011 Price Changes Mfg April 2012+ 1.9% Predicted End 2012 vs. End 2011 Price ChangesMfg April 2012 + 2.3%

  9. Predicted Employment Change Predicted End 2012 vs. April 2012 Employment Changes Mfg April 2012 + 1.4% Predicted End 2012 vs. End 2011 Employment Changes Mfg December 2011 + 1.3%

  10. Business Revenues (nominal) Predicted 2012 vs. 2011 Business Revenues Mfg April 2012 + 4.5% December 2011 + 5.5%

  11. Predicted Increase in Business Revenues by Industry Manufacturing 1. Apparel, Leather & Allied Products 2. Machinery 3. Primary Metals 4. Petroleum & Coal Products 5. Plastics & Rubber Products 2012 vs. 2011

  12. PMI 2002 – April 2012

  13. PMI Annual AverageRelative to Midpoint of 50 2011 Average: 55.2% 2012 Average (through April): 53.7%

  14. Manufacturing PMIApril 2012 Index: 54.8%

  15. Manufacturing New Orders April 2012 Index: 58.2%

  16. Manufacturing Production April 2012 Index: 61.0%

  17. Manufacturing Employment April 2012 Index: 57.3%

  18. Manufacturing Inventories April 2012 Index: 48.5%

  19. Manufacturing Supplier Deliveriesand Prices April 2012 Prices Index: 61.0% April 2012 Supplier Deliveries Index: 49.2%

  20. Percent of Normal Capacity April 2012 85.2% December 2011 85.2% April 2011 83.7% Non-Manufacturing Semiannual ForecastCurrent Operating Rate Non-Manufacturing

  21. Production Capacity Change Reported for 2011 April 2012 + 3.3% December 2011 + 3.2% Production Capacity Non-Mfg December 2011 + 1.1% Predicted for 2012 Production Capacity Non-Mfg

  22. Capital Expenditures Predicted2012 vs. 2011 Capital Expenditures Non-Mfg April 2012 + 3.6% December 2011 + 0.1%

  23. Purchase Price Changes Reported April 2012 vs. End 2011 Price Changes Non-Mfg April 2012 + 1.8% Predicted End 2012 vs. End 2011 Price Changes Non-Mfg April 2012 + 2.6%

  24. Predicted Employment Change Predicted End 2012 vs. April 2012 Employment Changes Non-Mfg April 2012+ 1.9% Predicted End 2012 vs. End 2011 Employment ChangesNon-Mfg December 2011 + 1.1%

  25. Business Revenues (nominal) Predicted 2012 vs. 2011 Business Revenues Non-Mfg April 2012 + 4.8% December 2011 + 3.1%

  26. Predicted Increase in Business Revenues by Industry Non-Manufacturing 1. Information 2. Mining 3. Finance & Insurance 4. Agriculture, Forestry, Fishing & Hunting 5. Other Services 2012 vs. 2011

  27. NMI January 2008-April 2012

  28. Comparison of PMI and NMI 2008-April 2012

  29. NMI Annual AverageAnnual Average Relative to Midpoint of 50 2011 Average: 54.5% 2012 Average (through April): 55.9%

  30. Non-Manufacturing Business Activity IndexAnnual Average Relative to Midpoint of 50 2011 Average: 57.3% 2012 Average (through April): 58.9%

  31. Non-Manufacturing Business ActivityApril 2012 Index: 54.6%

  32. Non-Manufacturing New Orders April 2012 Index: 53.5%

  33. Non-Manufacturing Inventories April 2012 Index: 54.0%

  34. Non-Manufacturing Employment April 2012 Index: 54.2%

  35. Non-Manufacturing Supplier Deliveriesand Prices April 2012 Prices Index: 53.6% April 2012 Supplier Deliveries Index: 51.5%

  36. Manufacturing SectorSummary • Operating rate is currently 81.6% of normal capacity. • Production capacity is expected to increase 5.2% in 2012. • Capital expenditures are expected to increase 6.2% in 2012. • Prices paid increased 1.9% through the end of April 2012. • Prices are expected to increase a total of 2.3% for all of 2012, indicating an expected increase in prices of 0.4% for the remainder of the year.

  37. Manufacturing SectorSummary (continued) • Manufacturing employment is expected to increase 1.4% during the remainder of 2012. • Manufacturing revenues are expected to increase 4.5% in 2012. • Overall, manufacturing is expected to grow moderately in 2012.

  38. Non-Manufacturing SectorSummary • Operating rate is currently 85.2% of normal capacity. • Production capacity is expected to increase 3.3% in 2012. • Capital expenditures are expected to increase 3.6% in 2012. • Prices paid increased 1.8% through the end of April 2012. • Prices are expected to increase an additional 0.8% over the remainder of the year, for a total 2012 increase of 2.6%.

  39. Non-Manufacturing SectorSummary (continued) • Non-manufacturing employment is expected to increase 1.9% during the balance of 2012. • Non-manufacturing revenues are expected to increase 4.8% in 2012. • Overall, non-manufacturing is expected to continue growing in 2012.

  40. Dr. Ray Perryman, The Perryman Group

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