The US economy will be mostly flat for the rest of 2025, say the nation’s purchasing and supply executives in the Spring 2025 ISM Supply Chain Planning Forecast (formerly known as the Spring ISM Semi-annual Economic Forecast). Expectations for the remainder of 2025 are lower than those expressed in December 2024. Trade issues, continued inflation concerns, and geopolitical uncertainty are all headwinds for the rest of the year.
For manufacturing sector revenue for 2025 is expected to increase, on average, by 0.1 percent. This is 4.1 percentage points lower than the December 2024 forecast of 4.2 percent, and 0.7 percentage point lower than the 0.8-percentage point year-over-year increase reported for 2024. Thirty-four percent of respondents say that revenues for 2025 will increase, on average, 9.7 percent compared to 2024.
Twenty-two percent say revenues will decrease (14.1 percent, on average), and 44 percent indicate no change. With an operating rate of 79.2 percent, a projected 1.3-percent decrease in capital expenditures, a 7.5-percent increase in prices paid for raw materials and a slight (0.1 percent) decrease in employment expected by the end of 2025, the manufacturing sector will, at best, grow very slightly.
Respondents expect no change in overall revenues in 2025, which is 3.9 percentage points lower than the 3.9-percent increase forecast in December 2024. Thirty-three percent of respondents say that revenues for 2025 will increase, on average, 9 percent compared to 2024. Meanwhile, 18 percent expect their revenues to decrease (16.6 percent, on average), and 49 percent indicate no change.