Economic growth in the US will continue to grow for the remainder of 2022, according to the Institute of Supply Management’s spring 2022 semiannual economic forecast. Despite continued inflation and geopolitical unrest, expectations for the rest of 2022 are similar to those expressed in December 2021.
Manufacturing revenue is now expected to increase by 9.2% in 2022, up from the 2.7% increase forecast in December 2021 and down from the 14.1% year-over-year increase reported for 2021.
Meanwhile, US non-manufacturing net revenue is expected to increase 4.9%, exceeding the 4.3% increase forecast in December 2021.
According to the ISM’s survey committee, manufacturing employment will be 3.2% higher year over year at the end of 2022. Thirty-eight percent of respondents expect employment to be, on average, 10.2% higher. Meanwhile, 8% predict employment will decrease 8% on average, and the remaining 54% expect employment levels to remain unchanged.
Nonmanufacturing employment will climb 2.5% in 2022, according to the report. For the remaining months of 2022, 34% of the respondents expect employment to increase on average by 10.3% while 9% anticipate employment to decrease on average by 11.2%, and the remaining 57% expect no change in employment levels.
“With 16 manufacturing sector industries expecting revenue growth in 2022, and 13 industries expecting employment growth in 2022 panelists forecast that recovery will continue the rest of the year,” said Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee. “Sentiment in each sector was generally consistent with industry performance reports in the April 2022 manufacturing ISM report on Business, as well as the fall semi-annual economic forecast conducted in December.”
However, other forecasts have cited bleaker outlooks.
According to the “Outlook Survey” report released by the National Association for Business Economics, economists raised their expectations for inflation rates this year and next and cited concerns over a potential US recession. More than half of respondents, 53%, estimate the odds of a recession within the next 12 months are greater than 25%.
In addition, the Philadelphia Federal Reserve’s Survey of Professional Forecasters reported this month that the US economy looks weaker than it did in February.