Economic Growth Continues in 2011

Manufacturing Growth Expected in 2011;
Revenue to Increase 5.6%;
Capital Expenditures to Increase 14.5%;
Capacity Utilization Currently at 80.2%

Non-Manufacturing to Grow Moderately in 2011;
Revenue to Increase 3.4%;
Capital Expenditures to Increase 3.7%;
Capacity Utilization Currently at 82.9%

Expectations are for a continuation of the economic recovery that began in mid-2009. The manufacturing sector continues to outpace the non-manufacturing sector and has greater expectations for growth in terms of revenue, say the nation’s purchasing and supply management executives in their December 2010 Semiannual Economic Forecast. The overall forecast projects optimism about the U.S. economy for 2011. The manufacturing sector, overall, is positive about prospects in 2011 with revenues expected to increase in 16 of 18 industries, while the non-manufacturing sector appears slightly less positive about the year ahead, with 12 of 18 industries expecting higher revenues. Business investment, a major driver in the U.S. economy, will increase substantially in the manufacturing sector, while investment in the non-manufacturing sector will increase at a lower level.

“Manufacturing purchasing and supply executives have expectations for continued growth and are optimistic about their organizations' prospects as they consider the first half of 2011, and they are even more positive about the second half”

These projections are part of the forecast issued by the Business Survey Committee of the Institute for Supply Management™ (ISM). The forecast was released today by Norbert J. Ore, CPSM, C.P.M., chair of the ISM Manufacturing Business Survey Committee; and by Anthony S. Nieves, C.P.M., CFPM, chair of the ISM Non-Manufacturing Business Survey Committee.

Manufacturing Summary

Expectations for 2011 are positive as 65 percent of survey respondents expect revenues to be greater in 2011 than in 2010. The panel of purchasing and supply executives expects a 5.6 percent net increase in overall revenues for 2011, compared to a 7.9 percent increase reported for 2010. The 16 manufacturing industries expecting improvement over 2010 — listed in order — are: Primary Metals; Fabricated Metal Products; Petroleum & Coal Products; Apparel, Leather & Allied Products; Transportation Equipment; Miscellaneous Manufacturing; Furniture & Related Products; Plastics & Rubber Products; Machinery; Textile Mills; Wood Products; Electrical Equipment, Appliances & Components; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Chemical Products; and Paper Products.

“Manufacturing purchasing and supply executives have expectations for continued growth and are optimistic about their organizations' prospects as they consider the first half of 2011, and they are even more positive about the second half," said Ore. "While 2010 has been a year of recovery in manufacturing, our forecast sees improvements in both investment and employment in 2011. Respondents expect cost pressures in 2011 to be somewhat greater than in 2010. Manufacturing growth is now in its 16th consecutive month as measured by and reported in the monthly Manufacturing ISM Report On Business^®.”

In the manufacturing sector, respondents report operating at 80.2 percent of their normal capacity, up from 72.8 percent reported in April 2010. Purchasing and supply executives predict that capital expenditures will increase by 14.5 percent in 2011, compared to a 5.9 percent increase reported for 2010. Survey respondents also forecast that they will reduce inventories in an effort to improve their purchased inventory-to-sales ratio in 2011. Manufacturers have an expectation that employment in the sector will increase by 1.8 percent, while labor and benefits costs are expected to increase an average of 1.9 percent in 2011. Manufacturing purchasers are predicting strength in exports and imports in 2011. They also expect the U.S. dollar to weaken on average against the currencies of major trading partners.

The panel also predicts the prices they pay will increase 2.7 percent during the first four months of 2011, and will increase an additional 1.3 percent during the balance of the year, with an overall increase of 4 percent for 2011. Survey respondents expect to realize supply chain improvements through improved inventory/asset management; cost reduction; supplier development/better metrics; supplier consolidation; and better risk management.

Non-Manufacturing Summary

Fifty-one percent of non-manufacturing supply management executives expect their 2011 revenues to be greater than in 2010. They currently expect a 3.4 percent net increase in overall revenues for 2011 compared to a 0.2 percent increase reported for 2010. The 12 non-manufacturing industries expecting revenue improvement in 2011 over 2010 — listed in order — are: Mining; Transportation & Warehousing; Retail Trade; Information; Wholesale Trade; Accommodation & Food Services; Management of Companies & Support Services; Finance & Insurance; Utilities; Educational Services; Other Services; and Health Care & Social Assistance.

“Non-manufacturing supply managers report operating at 82.9 percent of their normal capacity, below the 83.6 percent reported in April 2010. They are optimistic about continued growth in the first half of 2011 compared to the second half of 2010, and they have a higher level of optimism about the next 12 months than they had last December for 2010,” said Nieves. “They forecast that their capacity to produce products and provide services will rise by 2 percent during 2011, and capital expenditures will increase by 3.7 percent from the 2010 level. Non-manufacturers also predict that their employment will increase by 0.3 percent during 2011.”

Respondents in non-manufacturing industries expect that the prices they pay for materials and services will increase by 3.1 percent during 2011. They also forecast their overall labor and benefit costs will increase 1.1 percent for 2011. Profit margins are reported to have decreased in the second and third quarters of 2010, and respondents expect them to increase between now and April 2011. Survey respondents indicate that process improvement is the most frequently cited means of improving supply chains in 2011. Other improvement approaches include: Enhancement and leverage of technology; product rationalization; supplier management/consolidation; improved inventory management; and strategic cost management.

OPERATING RATE

Manufacturing

Manufacturing purchasing and supply executives report their companies are currently operating at 80.2 percent of normal capacity. This is a significant increase when compared to April 2010 (72.8 percent) and December 2009 (70.1 percent). The November data from the Manufacturing ISM Report On Business^® indicates the manufacturing sector is in its 16th consecutive month of growth. The following 11 industries — listed in order — are operating above the average rate of 80.2 percent: Apparel, Leather & Allied Products; Plastics & Rubber Products; Paper Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Textile Mills; Chemical Products; Computer & Electronic Products; Machinery; Fabricated Metal Products; and Food, Beverage & Tobacco Products.

Non-Manufacturing

Non-manufacturing supply executives report that their organizations are currently operating at 82.9 percent of normal capacity. This is lower than the 83.6 percent reported in April 2010, and higher than the 81.3 percent reported in December 2009. Considering production capacity increases reported in the following section of this forecast, this indicates that non-manufacturing industries are continuing to add capacity, but also find it necessary to maintain their utilization of capacity at a relatively high level. The following 10 industries — listed in order — are operating at or above the average capacity level of 82.9 percent: Information; Mining; Real Estate, Rental & Leasing; Educational Services; Transportation & Warehousing; Utilities; Finance & Insurance; Other Services; Health Care & Social Assistance; and Public Administration.

PRODUCTION CAPACITY

Manufacturing

Production capacity in manufacturing increased 7.5 percent in 2010 as 43 percent of purchasing and supply executives reported an average capacity increase of 21.1 percent, 6 percent reported decreases averaging 22.5 percent, and 51 percent reported no change. This compares to a predicted increase of 6.4 percent for 2010 made in April 2010. Expectations for 2011 are for an increase of 5.2 percent. The following 14 industries report achieving an increase in production capacity in 2010: Fabricated Metal Products; Petroleum & Coal Products; Primary Metals; Plastics & Rubber Products; Textile Mills; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Transportation Equipment; Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Wood Products; Machinery; Chemical Products; and Paper Products.

The principal means of achieving increases in production capacity in 2010 were (in order of importance):

1. More hours worked with existing personnel

2. Additional personnel (permanent, temporary or contract)

3. Additional plant and/or equipment

4. Replaced equipment with technically advanced equipment

Non-Manufacturing

The capacity to produce products or provide services in the non-manufacturing sector increased 0.5 percent during 2010. This compares to the 1.4 percent decrease reported in December 2009 for the year 2009, and is less than the prediction in April 2010 of a 2.3 percent increase for 2010. For 2011, an increase (2 percent) is predicted. For 2010, 22 percent of non-manufacturing supply managers indicate increases averaging 11.1 percent, and 14 percent of respondents indicate decreases averaging 14.4 percent. Sixty-four percent see no change in their capacity. The seven industries reporting increases in capacity in 2010 are: Mining; Wholesale Trade; Transportation & Warehousing; Retail Trade; Utilities; Accommodation & Food Services; and Other Services.

The principal means of achieving increases in production capacity in 2010 were (in order of importance):

1. More hours worked with existing personnel

2. Additional plant and/or equipment

3. Additional personnel (permanent, temporary or contract)

4. Replaced equipment with technically advanced equipment

CAPITAL EXPENDITURES — 2010 vs. 2009

Manufacturing

Purchasing and supply managers report 2010 capital expenditures increased 5.9 percent when compared to 2009 levels. The actual expenditures for 2010 exceed survey respondents’ previous expectations as they predicted an increase of 2 percent for 2010 in April 2010. The 47 percent of purchasers who reported increased capital expenditures in 2010 indicated an average increase of 27.3 percent, while the 18 percent who said their capital spending was reduced reported an average decrease of 41.1 percent. Thirty-five percent of respondents said they spent the same in 2010 as in 2009. The 11 industries showing increases in capital expenditures for 2010 — in order of percentage increase — are: Paper Products; Transportation Equipment; Machinery; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Textile Mills; Fabricated Metal Products; Nonmetallic Mineral Products; Printing & Related Support Activities; Computer & Electronic Products; and Food, Beverage & Tobacco Products.

Non-Manufacturing

Non-manufacturing supply management executives report their level of capital expenditures in 2010 compared to 2009 declined 0.1 percent. This compares to the 4.2 percent decrease reported for 2009 one year ago, and is significantly less than the 1.9 percent increase predicted by respondents in April 2010. Thirty-three percent of respondents report increases averaging 16.6 percent. An additional 26 percent report decreases averaging 22.3 percent. Forty-one percent indicate they spent the same on capital expenditures in 2010 as in 2009. The 10 industries experiencing increases in capital expenditures in 2010 — listed in order — are: Retail Trade; Transportation & Warehousing; Other Services; Information; Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; Construction; Finance & Insurance; Wholesale Trade; and Accommodation & Food Services.

PREDICTED CAPITAL EXPENDITURES — 2011 vs. 2010

Manufacturing

Purchasing and supply executives expect capital expenditures to increase 14.5 percent in 2011. The 50 percent of respondents who predict increased capital expenditures in 2011 indicate an average increase of 35.9 percent, while the 12 percent who said their capital spending would be reduced predict an average decrease of 27.6 percent. Thirty-eight percent said they expect to spend the same in 2011 as in 2010. The 15 industries predicting increases in capital expenditures for 2011 — in order of percentage increase — are: Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Petroleum & Coal Products; Fabricated Metal Products; Computer & Electronic Products; Transportation Equipment; Textile Mills; Wood Products; Furniture & Related Products; Miscellaneous Manufacturing; Apparel, Leather & Allied Products; Chemical Products; Machinery; Nonmetallic Mineral Products; and Food, Beverage & Tobacco Products.

Non-Manufacturing

Non-manufacturing purchasing and supply executives are expecting an increase of 3.7 percent in capital expenditures in 2011 from the decrease of 0.1 percent they are reporting for 2010. The 42 percent of respondents expecting to spend more on capital expenditures predict an average increase of 19.3 percent. An additional 16 percent anticipate a decrease averaging 28.6 percent. Forty-two percent expect to spend the same on capital expenditures in 2011 as in 2010. The 12 industries expecting increases in capital expenditures in 2011 — in order of percentage increase — are: Arts, Entertainment & Recreation; Transportation & Warehousing; Information; Retail Trade; Mining; Accommodation & Food Services; Wholesale Trade; Health Care & Social Assistance; Construction; Real Estate, Rental & Leasing; Finance & Insurance; and Professional, Scientific & Technical Services.

PRICES — Changes Between End of 2009 and End of 2010

Manufacturing

After an initial forecast in April 2010 of a 3.8 percent increase in prices paid, survey respondents now report realized price increases averaging 3.4 percent for the year. The 68 percent who say their prices are higher now than at the end of 2009 report an average increase of 6.3 percent, while the 17 percent who report lower prices averaged a 5.1 percent decrease. The remaining 15 percent indicate no change between the end of 2009 and the end of 2010. The 16 industries experiencing price increases — listed in order — are: Petroleum & Coal Products; Plastics & Rubber Products; Primary Metals; Paper Products; Printing & Related Support Activities; Textile Mills; Wood Products; Machinery; Transportation Equipment; Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Furniture & Related Products; and Computer & Electronic Products.

Non-Manufacturing

As 2010 draws to a close, non-manufacturing supply managers report prices they pay have increased by 2.2 percent over the entire year. This is more than the 1.7 percent increase they predicted in April 2010, and the same as the 2.2 percent decrease reported one year ago for 2009. Fifty-eight percent of purchasers report price increases averaging 5 percent. Twelve percent of purchasers indicate decreased prices with an average reduction of 6.3 percent, and 30 percent of respondents have not experienced overall price changes this year. The 16 industries reporting price increases in 2010 — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Wholesale Trade; Real Estate, Rental & Leasing; Retail Trade; Arts, Entertainment & Recreation; Other Services; Health Care & Social Assistance; Transportation & Warehousing; Information; Public Administration; Utilities; Educational Services; Accommodation & Food Services; Finance & Insurance; Management of Companies & Support Services; and Construction.

PRICES – Predicted Changes Between End of 2010 and April 2011

Manufacturing

Sixty-eight percent of purchasing and supply managers expect the prices they pay to increase in early 2011 by an average of 4.8 percent. At the same time, 12 percent anticipate decreases averaging 4.9 percent. Including the 20 percent who expect no change in prices in the first four months of 2011, purchasers expect the net average overall price change to increase 2.7 percent for the first four months of 2011. The 10 industries predicting increases in prices paid in the first part of 2010 higher than the 2.7 percent average — listed in order — are: Primary Metals; Food, Beverage & Tobacco Products; Textile Mills; Apparel, Leather & Allied Products; Fabricated Metal Products; Transportation Equipment; Plastics & Rubber Products; Printing & Related Support Activities; Chemical Products; and Furniture & Related Products.

Non-Manufacturing

Non-manufacturing survey respondents predict that their purchases in the first four months of 2011 will cost an average of 2.5 percent more than at the end of 2010. This is slightly more than the 2.2 percent increase reported in the preceding section for all of 2010. Considering the prediction of a price change for all of 2011 (3.1 percent), purchasing and supply executives apparently expect most of next year’s price increases to occur in the first part of the year. Sixty-five percent of non-manufacturing respondents predict the prices they pay will increase an average of 4.4 percent in the first part of 2011. Seven percent of respondents expect price decreases averaging 5.4 percent. The remaining 28 percent predict no change in prices in the first four months of 2011. The 10 industries predicting greater than or equal to the 2.5 percent average increase in prices they expect to pay in the first part of 2011 — in order of percentage increase — are: Construction; Wholesale Trade; Professional, Scientific & Technical Services; Other Services; Information; Public Administration; Arts, Entertainment & Recreation; Transportation & Warehousing; Utilities; and Retail Trade.

PRICES — Predicted Changes Between End of 2010 and End of 2011

Manufacturing

Respondents predict a net average increase in prices paid of 4 percent between December 2010 and December 2011, indicating they expect prices to increase an additional 1.3 percent during the period of April 2011 through December 2011. Seventy-five percent of respondents expect an average price increase of 6.1 percent, while 11 percent expect an average decline of 5.4 percent. The remaining 14 percent expect no change in their average prices paid for the year. The nine industries expecting to receive above-average increases by the end of 2011 — listed in order — are: Petroleum & Coal Products; Primary Metals; Plastics & Rubber Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Paper Products; Textile Mills; Wood Products; and Apparel, Leather & Allied Products.

Non-Manufacturing

For all of 2011, non-manufacturing supply management executives expect their prices to increase an average of 3.1 percent. Seventy-one percent of respondents expect increases averaging 5.1 percent, 8 percent anticipate prices to drop an average of 6.2 percent, and 21 percent foresee no change in prices during the next year. The 10 industries expecting greater than the 3.1 percent average price increase by the end of 2011 — in order of percentage increase — are: Wholesale Trade; Construction; Real Estate, Rental & Leasing; Accommodation & Food Services; Educational Services; Information; Utilities; Arts, Entertainment & Recreation; Public Administration; and Retail Trade.

LABOR AND BENEFIT COSTS — Predicted Rate Change End of 2010 vs. End of 2011

Manufacturing

Purchasing and supply executives expect higher overall labor and benefit costs for 2011. Sixty-six percent of respondents expect increased labor and benefit costs and expect them to grow by an average of 3.5 percent for all of 2011, while the 4 percent forecasting lower costs see them decreasing by an average of 12.6 percent. Including the 30 percent of respondents who believe costs will remain the same, the expected overall net rate of increase is 1.9 percent between the end of 2010 and the end of 2011. The 12 industries expecting to pay an increase of 1.9 percent or higher — in order of percentage increase — are: Textile Mills; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Primary Metals; Paper Products; Fabricated Metal Products; Apparel, Leather & Allied Products; Miscellaneous Manufacturing; Machinery; Furniture & Related Products; Plastics & Rubber Products; and Wood Products.

Non-Manufacturing

Purchasing and supply executives' expectation is for a 1.1 percent increase in labor and benefit costs for non-manufacturing industries in 2011. Fifty-six percent of respondents expect such costs to increase by an average of 3.5 percent. Another 10 percent of respondents expect labor and benefit costs to shrink by an average of 9.3 percent, and 34 percent believe costs will remain stable during 2011. The 15 industries expecting increases in labor and benefit costs in 2011 over 2010 — in order of percentage increase — are: Real Estate, Rental & Leasing; Other Services; Agriculture, Forestry, Fishing & Hunting; Transportation & Warehousing; Accommodation & Food Services; Utilities; Information; Health Care & Social Assistance; Management of Companies & Support Services; Retail Trade; Arts, Entertainment & Recreation; Finance & Insurance; Professional, Scientific & Technical Services; Construction; and Wholesale Trade.

EMPLOYMENT

Change in Overall Employment

Manufacturing

ISM's Manufacturing Business Survey Committee members report that manufacturing employment increased 7.1 percent since April 2010, and forecast that employment will increase, on average, 1.8 percent for the full year of 2011. Forty percent of respondents expect employment to be 6.2 percent higher, while 9 percent predict employment to be lower by 7.8 percent. The remaining 51 percent of respondents expect their employment levels to be unchanged in 2011. The 13 industries predicting increases in employment in 2011 — listed in order — are: Wood Products; Fabricated Metal Products; Primary Metals; Miscellaneous Manufacturing; Furniture & Related Products; Transportation Equipment; Computer & Electronic Products; Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Chemical Products; and Machinery.

Non-Manufacturing

ISM's Non-Manufacturing Business Survey Committee members report that non-manufacturing employment has decreased 2.1 percent since April 2010. Looking ahead to 2011, they forecast that employment will increase 0.3 percent by the end of 2011. For 2011, 27 percent of respondents expect higher levels of employment, 20 percent anticipate lower levels, and 53 percent expect their employment levels to be unchanged. The six industries anticipating increases in their employment in 2011 — listed in order — are: Mining; Transportation & Warehousing; Retail Trade; Professional, Scientific & Technical Services; Wholesale Trade; and Information.

Note: A diffusion index above 50 percent would generally indicate an expectation of higher employment; below 50 percent, an expectation of lower employment.

EXPORT BUSINESS — Predicted Change for Next Half Year (First Half of 2011)

Manufacturing

The responses for this semiannual report indicate purchasers see increases in new export orders for the first half of 2011. This is consistent with the most recent ISM New Export Orders Index data in the monthly Manufacturing ISM Report On Business^®, which has shown growth in new export orders in the last 17 months. Of the 85 percent of respondents who export, 60 percent predict an increase (53 percent moderate and 7 percent substantial) over the next half year. Three percent of respondents (3 percent moderate and 0 percent substantial) predict a decrease in their exports, and 37 percent anticipate no change in exports over the next half year. The 14 industries expecting growth in exports during the first half of 2011 — listed in order — are: Apparel, Leather & Allied Products; Primary Metals; Petroleum & Coal Products; Textile Mills; Paper Products; Miscellaneous Manufacturing; Fabricated Metal Products; Plastics & Rubber Products; Electrical Equipment, Appliances & Components; Computer & Electronic Products; Transportation Equipment; Food, Beverage & Tobacco Products; Machinery; and Chemical Products.

Non-Manufacturing

For the first half of 2011, non-manufacturing supply managers who report that their organizations engage in exporting feel more optimistic than they did one year ago concerning their export business. Of the 20 percent of non-manufacturing business survey respondents who report that they export, 32 percent predict an increase (20 percent moderate and 12 percent substantial) over the next half year. Four percent of the respondents expect a decrease in their exports (0 percent moderate and 4 percent substantial), and 64 percent anticipate no change in exports over the next half year. Of the industries that report they export, the following five industries expect growth in export business in the first half of 2011: Transportation & Warehousing; Professional, Scientific & Technical Services; Wholesale Trade; Finance & Insurance; and Retail Trade.

IMPORT BUSINESS — Predicted Change for Next Half Year (First Half of 2011)

Manufacturing

Purchasers expect increases in imports in the first half of 2011. Of the 91 percent of purchasers who reported they import, 48 percent predict an increase in their imports over the next half year (42 percent moderate and 6 percent substantial), while 10 percent predict a decrease in imports of materials (9 percent moderate and 1 percent substantial). Less than half of survey respondents (42 percent) expect no change in imports. The 14 industries expecting growth in imports — listed in order — are: Nonmetallic Mineral Products; Apparel, Leather & Allied Products; Petroleum & Coal Products; Wood Products; Machinery; Primary Metals; Transportation Equipment; Electrical Equipment, Appliances & Components; Miscellaneous Manufacturing; Paper Products; Chemical Products; Computer & Electronic Products; Fabricated Metal Products; and Food, Beverage & Tobacco Products.

Non-Manufacturing

Non-manufacturers have higher expectations for the use of imports for the first half of 2011 than they did in December 2009 for the first half of 2010. Of the 47 percent of non-manufacturing organizations who reported they import, 34 percent (27 percent moderate and 7 percent substantial) predict an increase in their imports during the first half of 2011. Seven percent of the respondents (7 percent moderate and 0 percent substantial) predict a decrease in imports of materials and services. The remaining 59 percent of purchasers expect no change in imports over the next half year. The nine industries expecting growth in imports — listed in order — are: Information; Wholesale Trade; Retail Trade; Professional, Scientific & Technical Services; Agriculture, Forestry, Fishing & Hunting; Other Services; Transportation & Warehousing; Accommodation & Food Services; and Finance & Insurance.

BUSINESS REVENUES

Business Revenues Comparison — 2010 vs. 2009

Manufacturing

Summarizing revenues for 2010, 67 percent of respondents say revenue was better than 2009, and that nominal (before adjusting for inflation) revenues increased an average of 14.1 percent over 2009. Conversely, 14 percent say their nominal revenues decreased in 2010 by an average of 11.1 percent, and the remaining 19 percent indicate no change. Overall, purchasing and supply executives indicate a net nominal increase of 7.9 percent in business revenues for 2010 over 2009. This is greater than the 6.3 percent increase that was forecast in April 2010 for all of 2010, and the 5.7 percent increase predicted in December 2009 for all of 2010. The 15 industries reporting increases (highest to lowest) in revenues in 2010 are: Primary Metals; Fabricated Metal Products; Machinery; Plastics & Rubber Products; Transportation Equipment; Computer & Electronic Products; Chemical Products; Apparel, Leather & Allied Products; Paper Products; Textile Mills; Wood Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Printing & Related Support Activities; and Electrical Equipment, Appliances & Components.

Non-Manufacturing

Non-manufacturing supply management executives report that business revenues for 2010 have increased over 2009 by 0.2 percent. This is slightly less than the 0.3 percent increase predicted in April 2010 for all of 2010. This compares to a 1.3 percent increase reported one year ago for 2009 revenues over 2008 revenues. The 46 percent of respondents reporting better business in 2010 than in 2009 estimate an average nominal (before adjusting for inflation) revenue increase of 8.9 percent. This is in contrast to an average nominal decrease of 15.4 percent reported by the 25 percent of respondents who indicate worse business in 2010. The remaining 29 percent have experienced no change in 2010. The eight industries reporting increases in revenues in 2010 — listed in order — are: Mining; Management of Companies & Support Services; Information; Retail Trade; Wholesale Trade; Agriculture, Forestry, Fishing & Hunting; Other Services; and Finance & Insurance.

Business Revenues Prediction for 2011

Manufacturing

Purchasers forecast that 2011 will be weaker than 2010 as measured by their revenue expectations. The 65 percent of respondents forecasting better business in 2011 than in 2010 estimate an average nominal (before adjusting for inflation) increase of 13.1 percent in their organizations’ revenues. This is in contrast to an average nominal decrease of 26.9 percent forecast by the 11 percent who predict worse business in 2011. Including the 24 percent who see no change in 2011, the forecast for overall net nominal increase in business revenues for 2011 over 2010 is 5.6 percent. The following 16 manufacturing industries expecting revenue improvement over 2010 — listed in order &mdash