Purchasing and Supply Executives Predict Growth

Tempe, AZ,  May 9, 2007--Economic growth in the United States is sustainable throughout the remainder of 2007, say the nation's purchasing and supply executives in their spring 2007 Semiannual Economic Forecast. Expectations for the remainder of 2007 are encouraging in both the manufacturing and non-manufacturing sectors.

These projections are part of the forecast issued by the Business Survey Committee of the Institute for Supply Management™ (ISM). The forecast was presented today by Norbert J. Ore, C.P.M., chair of the ISM Manufacturing Business Survey Committee, and group director, strategic sourcing and procurement, Georgia-Pacific LLC; and by Anthony S. Nieves, C.P.M., CFPM, chair of the ISM Non-Manufacturing Business Survey Committee, and senior vice president — supply management, Hilton Hotels Corporation.

Manufacturing Summary

The survey panel of purchasing and supply management executives remains optimistic with 62 percent of respondents predicting revenues to be greater in 2007 than in 2006. This is reflected in their expectations of a 5.6 percent net increase in revenues for the period. To support the revenue growth expectations, manufacturers expect to increase capital expenditures 5.8 percent for the year in spite of a lower current operating rate of 82.8 percent.

The manufacturing industries expecting the greatest revenue increases in 2007 — listed in order — are: Primary Metals; Miscellaneous Manufacturing*; Electrical Equipment, Appliances & Components; Chemical Products; Fabricated Metal Products; Plastics & Rubber Products; and Food, Beverage & Tobacco Products. "Respondents are optimistic about their organizations' prospects for 2007," said Ore. "While 2007 appears to be lagging behind the last three years in terms of manufacturing growth, the forecast indicates manufacturers are investing and foresee revenue improvement in their future."

Non-Manufacturing Summary

Fifty-four percent of non-manufacturing purchasing and supply executives expect their 2007 revenues to be greater than in 2006. They currently expect a 2.1 percent net increase in overall revenues, lower than the 6.4 percent increase that was forecast in December 2006. Non-manufacturing industries expecting greater-than-average revenue in 2007 are: Professional, Scientific & Technical Services; Information; Arts, Entertainment & Recreation; Other Services**; Health Care & Social Assistance; Retail Trade; Real Estate, Rental & Leasing; and Accommodation & Food Services.