Economic Recovery Continues in 2010: Institute for Supply Management

Non-Manufacturing
Non-manufacturing survey respondents predict that their purchases in the first four months of 2010 will cost an average of 1.2 percent more than at the end of 2009. This is more than the decrease reported in the preceding section for all of 2009. Considering the prediction of price change for all of 2010 (1.1 percent), purchasing and supply executives apparently expect most of next year’s price increase to occur in the first part of the year. Forty-seven percent of non-manufacturing respondents predict the prices they pay will increase an average of 4.4 percent in the first part of 2010. Thirteen percent of respondents expect price decreases averaging 6.6 percent. The remaining 40 percent predict no change in prices in the first four months of 2010. The seven industries predicting greater than the 1.2 percent average increase in prices they expect to pay in the first part of 2010 — in order of percentage increase — are: Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; Health Care & Social Assistance; Information; Mining; Management of Companies & Support Services; and Public Administration.

PRICES — Predicted Changes Between End of 2009 and End of 2010

Manufacturing
Respondents predict a net average increase in prices paid of 2.6 percent between December 2009 and December 2010, indicating they expect prices to increase an additional 2.4 percent during the period of April 2010 through December 2010. Sixty-five percent of respondents expect an average price increase of 5.5 percent, while 14 percent expect an average decline of 7.6 percent. The remaining 21 percent expect no change in their average prices paid for the year. The 11 industries expecting to receive above-average increases by the end of 2010 — in order of percentage increase — are: Transportation Equipment; Petroleum & Coal Products; Wood Products; Nonmetallic Mineral Products; Paper Products; Plastics & Rubber Products; Textile Mills; Food, Beverage & Tobacco Products; Fabricated Metal Products; Furniture & Related Products; and Miscellaneous Manufacturing(a).