The Business Survey Committee of the Institute for Supply Management show ISM members anticipate a 1.9% growth in manufacturing revenues during the second half, with non-manufacturing revenue growing at a much faster pace, 5.4%. Manufacturing industries expecting the greatest improvement over 2002 are, listed in order: Paper, Chemicals, Food, Transportation & Equipment, Wood & Wood Products; Electronic Components & Equipment, Textiles, Instruments & Photographic Equipment, and Rubber & Plastic Products.

According to Norbert Ore, chair of the survey committee, "second half improvement should overcome the major concern of a weak economy" and additional concerns. He added, "Capacity utilization below 80% discourages capital investment and is reflected in revised spending plans that now predict a decline in year-over-year capital spending."

The survey showed manufacturing members averaging capacity utilization of 79%, down marginally from the 79.2% reported in the previous survey last December. They now predict capital expenditures to decrease 3.1% in 2003, compared with December's prediction of a 4.6% increase. Members also forecast that they will continue to reduce their organization's purchased inventory-to-sales ratio.

Manufacturing purchasers predict growth in exports and imports at slightly decelerating rates from their forecast last December, and expect the U.S. dollar to remain strong against the currencies of major trading partners. They predict the prices they pay will decrease 0.3% from the present until the end of 2003.