the semiannual economic forecast april 30, 2013 ism business survey committees
TRANSCRIPT
The Semiannual Economic Forecast
April 30, 2013ISM Business Survey Committees
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Agenda Bradley J. Holcomb, CPSM, CPSD
Manufacturing Semiannual Forecast
Anthony S. Nieves, C.P.M., CFPM Non-Manufacturing Semiannual Forecast
Bernard Baumohl, The Economic Outlook Group
Q & A
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Dr. John H. Hoagland (December 22, 1919 – March 6, 2013)
BA from Oberlin College, MBA from Harvard University, PhD from the Ohio State University
Purchasing Professor at Michigan State University’s Broad College of Business from 1952 through his retirement in 1990
Co-founder of the Purchasing and Supply Management Executive Seminar at MSU
Awarded an NAPM Professorship ISM J. Shipman Gold Medal Award recipient
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Dr. John H. Hoagland (December 22, 1919 – March 6, 2013)
Paul Harris Fellow from Rotary International Robert Angell Award honoree from NAPM of Central
Michigan Honorary Alumni Award winner from MSU Alumni
Association Hoagland-Metzler Endowed Chair in Purchasing and
Supply Management at MSU ISM John H. Hoagland Award for Distinguished Service
by Academics & Practitioners created to honor Dr. Hoagland
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Dr. John H. Hoagland (December 22, 1919 – March 6, 2013)
Passionately championed the advancement and recognition of the ISM Report On Business® and the PMI
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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
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Manufacturing Semiannual ForecastCurrent Operating Rate
Percent of Normal Capacity
April 2013 80.2%
December 2012 77.5%
April 2012 81.6 %
Manufacturing
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Reported for 2012
Production Capacity Change
April 2013 + 6.7%
December 2012 + 6.8%
Predicted for 2013
December 2012 + 1.3%
Production Capacity Mfg
Production Capacity Mfg
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Predicted2013 vs. 2012
Capital Expenditures
Capital Expenditures Mfg
April 2013 + 9.1%
December 2012 + 7.6%
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Price Changes Mfg
April 2013 + 1.4%
Purchase Price Changes
Reported April 2013 vs. End 2012
Predicted End 2013 vs. End 2012
Price Changes Mfg
April 2013 + 2.3%
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Predicted Employment Change
Employment Changes Mfg
April 2013 + 0.9%
Predicted End 2013 vs. April 2013
Predicted End 2013 vs. End 2012
Employment Changes Mfg
December 2012 + 0.8%
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Business Revenues (nominal)
Business Revenues Mfg
April 2013 + 4.8%
December 2012 + 4.6%
Predicted 2013 vs. 2012
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Manufacturing
1. Wood Products
2. Furniture & Related Products
3. Nonmetallic Mineral Products
4. Petroleum & Coal Products
5. Electrical Equipment, Appliances & Components
Predicted Increase in Business Revenues by Industry
2013 vs. 2012
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PMI 2005 – March 2013
Jan-0
5
Jul-0
5
Jan-0
6
Jul-0
6
Jan-0
7
Jul-0
7
Jan-0
8
Jul-0
8
Jan-0
9
Jul-0
9
Jan-1
0
Jul-1
0
Jan-1
1
Jul-1
1
Jan-1
2
Jul-1
2
Jan-1
3
Jul-1
332
42
52
62
PMI 50% Breakeven - Mfg Economy 42.2% Breakeven - Overall Economy
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PMI Annual AverageRelative to Midpoint of 50
2012 Average: 51.7%2013 Average (through March): 52.9%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
-14
-12.5
-11
-9.5
-8
-6.5
-5
-3.5
-2
-0.5
1
2.5
4
5.5
7
8.5
10
16
Percent of Normal Capacity
April 2013 84.7%
December 2012 85.4%
April 2012 85.2%
Non-Manufacturing
Non-Manufacturing Semiannual ForecastCurrent Operating Rate
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Reported for 2012
Production Capacity Change
April 2013 + 2.3%
December 2012 + 3.4%
Predicted for 2013
December 2012 + 3.2%
Production Capacity Non-Mfg
Production Capacity Non-Mfg
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Predicted2013 vs. 2012
Capital Expenditures
Capital Expenditures Non-Mfg
April 2013 + 3.6%
December 2012 + 7.0%
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Price Changes Non-Mfg
April 2013 + 1.9%
Purchase Price Changes
Reported April 2013 vs. End 2012
Predicted End 2013 vs. End 2012
Price Changes Non-Mfg
April 2013 + 2.4%
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Predicted Employment Change
Employment Changes Non-Mfg
April 2013 + 1.3%
Predicted End 2013 vs. April 2013
Predicted End 2013 vs. End 2012
Employment Changes Non-Mfg
December 2012 + 1.3%
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Business Revenues (nominal)
Business Revenues Non-Mfg
April 2013 + 3.5%
December 2012 + 4.3%
Predicted 2013 vs. 2012
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Non-Manufacturing1. Construction
2. Transportation & Warehousing
3. Retail Trade
4. Professional, Scientific & Technical
Services
5. Other Services
Predicted Increase in Business Revenues by Industry
2013 vs. 2012
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NMI January 2008 – March 2013
Jan-08Jul-08
Jan-09Jul-09
Jan-10Jul-10
Jan-11Jul-11
Jan-12Jul-12
Jan-1335
40
45
50
55
60
NMI
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Comparison of PMI and NMIJanuary 2008 – March 2013
Jan-08Jul-08
Jan-09Jul-09
Jan-10Jul-10
Jan-11Jul-11
Jan-12Jul-12
Jan-1333
38
43
48
53
58
63
NMI PMI 50% Breakeven
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NMI Annual AverageAnnual Average Relative to Midpoint of 50
2012 Average: 54.6% 2013 Average (through March): 55.2%
2008 2009 2010 2011 2012 2013
-10
-8.5
-7
-5.5
-4
-2.5
-1
0.5
2
3.5
5
6.5
8
9.5
11
12.5
14
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Non-Manufacturing Business Activity IndexAnnual Average Relative to Midpoint of 50
2012 Average: 57.7%2013 Average (through March): 56.6%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
-4
-2
0
2
4
6
8
10
12
14
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Operating rate is currently 80.2% of normal capacity. Production capacity is expected to increase 6.7% in
2013. Capital expenditures are expected to increase 9.1% in
2013. Prices paid increased 1.4% through the end of April
2013. Prices are expected to increase a total of 2.3% for all of
2013, indicating an expected increase in prices of 0.9% for the remainder of the year.
Manufacturing SectorSummary
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Manufacturing employment is expected to increase 0.9% during the remainder of 2013.
Manufacturing revenues are expected to increase 4.8% in 2013.
Overall, manufacturing is expected to continue growing in 2013.
Manufacturing SectorSummary (continued)
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Operating rate is currently 84.7% of normal capacity. Production capacity is expected to increase 2.3% in
2013. Capital expenditures are expected to increase 3.6% in
2013. Prices paid increased 1.9% through the end of April 2013. Prices are expected to increase an additional 0.5% over
the remainder of the year, for a total 2013 increase of 2.4%.
Non-Manufacturing SectorSummary
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Non-manufacturing employment is expected to increase 1.3% during the balance of 2013.
Non-manufacturing revenues are expected to increase 3.5% in 2013.
The non-manufacturing sector is projected to maintain the course of sustainable growth in 2013.
Non-Manufacturing SectorSummary (continued)
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Bernard Baumohl, Chief Global Economist atThe Economic Outlook Group