1. 1 2014 Semiannual Forecast Report December 9, 2014 ISM Business Survey Committees

2. 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. 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 2015.  Operating rate is currently at 83.7%.  Production capacity increased by 5.3% in 2014.  Production capacity is expected to increase by 5.6% in 2015.

4. 4  Capital expenditures increased 14.7% in 2014.  Capital expenditures are expected to increase 3.7% in 2015.  Prices paid increased 1.4% in 2014.  Overall 2015 prices paid are expected to increase 1.5%.  Labor and benefit costs are expected to increase 3.2% in 2015. Summary Manufacturing continued

5. 5  Manufacturing employment is expected to increase 1.5% in 2015.  Expect growth in U.S. exports in 2015.  Expect growth in U.S. imports in 2015.  Manufacturing revenues (nominal) are up 3.6% in 2014.  Manufacturing revenues (nominal) are expected to increase 5.6% in 2015. Summary Manufacturing continued

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

7. 7 Summary Non-Manufacturing The non-manufacturing sector continues to expand, and the forecast indicates an increased rate of expansion in 2015.  Operating rate is currently at 87.6%.  Production capacity increased 3.6% in 2014.  Production and provision capacity is expected to increase 4.3% in 2015.  Capital expenditures increased 3.3% in 2014.

8. 8  Capital expenditures are expected to increase 3.8% in 2015.  Prices paid increased 1.7% in 2014.  Prices paid are expected to increase 2.5% in 2015.  Labor and benefit costs are expected to increase 2.1% in 2015. Summary Non-Manufacturing continued

9. 9  Non-manufacturing employment is expected to increase 1.7% in 2015.  Expect export levels to increase in 2015.  Expect import growth in 2015.  Non-manufacturing revenues (nominal) are up 5.1% in 2014.  Non-manufacturing revenues (nominal) are expected to rise 10% in 2015.

10. 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. 11 Questions? Thank you! 2014 Semiannual Forecast Report