US economic improvement to continue in 2023, forecasts ISM

The US apparel industry is operating at or above the average rate of 88.4 per cent.

US economic improvement will continue next year, according to the December 2022 Semiannual Economic Forecast published by the Institute of Supply Management. Revenues are expected to increase in 15 of 18 manufacturing industries. Capital expenditures are expected to increase by 2.6 per cent in the manufacturing sector after a 12-per cent increase in 2022.

The manufacturing employment base is expected to grow by 3.9 per cent in 2023. Compared to the first half (H1), growth in the second half (H2) next year is projected to rebound in manufacturing.

Expectations for the US manufacturing sector for 2023 are positive, as 45 per cent of survey respondents expect revenues to be greater next year than in this year.

The panel of purchasing and supply executives expects a 5.5-per cent net increase in overall revenues for 2023, compared to a 9.3-per cent increase reported for 2022.

Fifteen of the 18 US manufacturing industries, including apparel and textiles, expect revenue improvement in 2023, the Tempe, Arizona-based ISM said in a release.

Respondents expect raw materials pricing pressure to increase in 2023, but still see H1 2023 profit margins improving over H2 2022. Wages and employment will continue to grow. Manufacturers also predict growth in both exports and imports in 2023.

The panel predicts that prices paid for raw materials will increase by 2.5 per cent during the first five months of the year, with an overall increase of 2 per cent for 2023. This compares to a reported 11.4 per cent increase in raw materials prices between the end of 2021 and 2022.

US manufacturing purchasing and supply executives report their companies are currently operating at 88.4 per cent of normal capacity. This is a 1.2-percentage point increase when compared to May 2022 (87.2 per cent) and a decrease when compared to December 2021 (88.7 per cent).

Fibre2Fashion News Desk (DS)