MNI BRIEF: ISM Expects Sluggish Growth, Sticky Services Prices
The U.S. economy will continue to softly expand for the rest of 2024 with expectations for little manufacturing price increases but continuing inflation in services, America's purchasing and supply executives said in the Institute for Supply Management Spring 2024 semiannual economic forecast.
"I still feel that we are in an expansion cycle but it's definitely weak," manufacturing chief Tim Fiore told reporters on a call. Manufacturing survey respondents expect a year-over-year, net-average prices increase of 1.9% for 2024. With respondents reporting price increases of 1.6% through April 2024, prices are projected to increase slightly for the rest of the year. Manufacturing employment is expected to increase 0.3% in 2024.
"Buyers and sellers have acknowledged that the second half of the year is not going to continue to have these arguments about additional costs," said Fiore about the manufacturing sector. (See: MNI INTERVIEW: ISM Chief Sees Bumpy US Manufacturing Growth)
The services sector is projected to grow slightly in 2024 but prices are expected to be more sticky. Prices paid increased 2.3% through April and prices of raw materials are expected to increase a total of 3.2% for all of 2024, indicating expectations of continuing inflation. Services employment is expected to increase 0.8% this year.