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2016 Manufacturing Outlook

The US manufacturing sector is off to a strong start in 2016. Markit, a global financial information and service company, credits a strong US economy for improvements in practically every sector that they monitor.  Many manufacturers are already reporting operating at just under 82% of their normal capacity, which is well above the 79.5% reported in April of 2015.

While export sales rose at a negligible pace, many companies reported stronger domestic economic conditions.  Markit goes on to report that January marked an upturn in production volumes and with positive new business trends, there is an expectation that domestic demand will continue to improve over the course of 2016.

Additionally, January marked the fifth consecutive month of reductions in manufacturers’ average cost burdens.  To that point, Bradley Holcomb, chair of the ISM Manufacturing Business Survey Committee, notes that “respondents expect raw materials pricing pressures in 2016 to be very low, and expect their profit margins will improve.” Overall, the future of manufacturing in 2016 looks bright.

Sources: Markit, Institute for Supply Management, Moody’s Investors Service

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