The manufacturing industry is expected to take a turn for the better in 2021. Amongst the global pandemic, manufacturing growth was slim to none but capacity levels and revenues are almost back to normal.
From the start of the pandemic to now, capacity levels have improved a great deal. ISM reported that manufacturing executives say their companies are currently operating at “85.7% of normal capacity” which is a “9.8% increase when compared to May 2020 (75.9%) and an increase when compared to December 2019 (83.7%)” (www.ismworld.org).
The forecast is hopeful for 2021 with the vaccine rollout and the country beginning to open up again. ISM’s economic forecast says, “Expectations for 2021 are positive, as 59% of survey respondents expect revenues to be greater in 2021 than in 2020. The panel of purchasing and supply executives expects a 6.9% net increase in overall revenues for 2021, compared to a 1.3% decrease reported for 2020” (www.ismworld.org). Even though these are only projections, it is important to understand that once businesses open up completely, there will be no stopping economic growth.
With economic normalcy slowly becoming reality, the prices of raw materials will also go back to normal. ISM also says, “The panel predicts the prices paid for raw materials will increase by 2.5% during the first five months of 2021, with an overall increase of 2.9% for 2021. This compares to a reported 2.8% decrease in raw materials prices between the end of 2019 and May of 2020” (www.ismworld.org). What goes down must also rise back up?
Another good that is going to come out of the manufacturing growth in 2021 is the amount of jobs it will create. Unemployment was directly affected by Covid-19 and will only be mitigated when Covid is under control. Another projection made by ISM’s Manufacturing Business Survey Committee says, “sector employment decreased 2.6% in 2020, and forecast that employment will increase by 2.5% on average, for the full year of 2021” (www.ismworld.org). That being said, 2020 saw one of the worst unemployment years in a long time, and you can only go up from there.
Experts have high hopes for the rest of 2021, and from what we’ve seen so far, we can say they might be on the right track.
* Statistics supplied by ISM World (www.ismworld.org)
