Semiannual Forecast Report December 9, 2014 ISM Business Survey Committees

2 Speakers Bradley J. Holcomb, CPSM, CPSD, chair of the ISM Manufacturing Business Survey Committee Anthony S. Nieves, CPSM, C.P.M., CFPM, chair of the ISM Non-Manufacturing Business Survey Committee

3 Summary Manufacturing The manufacturing sector is currently expanding, and the forecast indicates that it will continue to expand in the first half of 2015, and the second half of  Operating rate is currently at 83.7%.  Production capacity increased by 5.3% in  Production capacity is expected to increase by 5.6% in 2015.

4  Capital expenditures increased 14.7% in  Capital expenditures are expected to increase 3.7% in  Prices paid increased 1.4% in  Overall 2015 prices paid are expected to increase 1.5%.  Labor and benefit costs are expected to increase 3.2% in Summary Manufacturing continued

5  Manufacturing employment is expected to increase 1.5% in  Expect growth in U.S. exports in  Expect growth in U.S. imports in  Manufacturing revenues (nominal) are up 3.6% in  Manufacturing revenues (nominal) are expected to increase 5.6% in Summary Manufacturing continued

6  The U.S. dollar is expected to strengthen on average versus major trading partner currencies in  Overall attitude of manufacturing supply managers: optimistic outlook, with 93% of respondents predicting 2015 will be the same as or better than 2014.

7 Summary Non-Manufacturing The non-manufacturing sector continues to expand, and the forecast indicates an increased rate of expansion in  Operating rate is currently at 87.6%.  Production capacity increased 3.6% in  Production and provision capacity is expected to increase 4.3% in  Capital expenditures increased 3.3% in 2014.

8  Capital expenditures are expected to increase 3.8% in  Prices paid increased 1.7% in  Prices paid are expected to increase 2.5% in  Labor and benefit costs are expected to increase 2.1% in Summary Non-Manufacturing continued

9  Non-manufacturing employment is expected to increase 1.7% in  Expect export levels to increase in  Expect import growth in  Non-manufacturing revenues (nominal) are up 5.1% in  Non-manufacturing revenues (nominal) are expected to rise 10% in 2015.

10 Summary Non-Manufacturing continued  Overall attitude of non-manufacturing supply managers: mostly positive outlook, with 89 percent of respondents predicting 2015 will be the same as or better than 2014.

11 Questions? Thank you! 2014 Semiannual Forecast Report