Economic Recovery Continues in 2010: Institute for Supply Management
For all of 2010, non-manufacturing supply management executives expect their prices to increase an average of 1.1 percent. Fifty-two percent of respondents expect increases averaging 5.1 percent, 18 percent anticipate prices to drop an average of 8.9 percent, and 30 percent foresee no change in prices during the next year. The 10 industries expecting greater than the 1.1 percent average price increase by the end of 2010 — in order of percentage increase — are: Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; Mining; Management of Companies & Support Services; Public Administration; Retail Trade; Health Care & Social Assistance; Agriculture, Forestry, Fishing & Hunting; Wholesale Trade; and Educational Services.
LABOR AND BENEFIT COSTS — Predicted Rate Change End of 2009 vs. End of 2010
Purchasing and supply executives expect higher overall labor and benefit costs for 2010. Forty-eight percent of respondents expect increased labor and benefit costs and expect them to grow by an average of 3.9 percent for all of 2010, while the 5 percent forecasting lower costs see them decreasing by an average of 10.6 percent. Including the 47 percent of respondents who believe costs will remain the same, the expected overall net rate of increase is 1.4 percent between the end of 2009 and the end of 2010. The 14 industries expecting to pay increased labor and benefits costs — in order of percentage increase — are: Nonmetallic Mineral Products; Transportation Equipment; Textile Mills; Food, Beverage & Tobacco Products; Petroleum & Coal Products; Paper Products; Apparel, Leather & Allied Products; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Chemical Products; Furniture & Related Products; Miscellaneous Manufacturing(a); Fabricated Metal Products; and Machinery.
Supply executives' expectation is for no change in labor and benefit costs for non-manufacturing industries in 2010. Thirty-eight percent of respondents expect such costs to increase by an average of 3.8 percent. Another 19 percent of respondents expect labor and benefit costs to shrink by an average of 7.9 percent, and 43 percent believe costs will remain stable during 2010. The 12 industries expecting increases in labor and benefit costs in 2010 over 2009 — in order of percentage increase — are: Mining; Accommodation & Food Services; Real Estate, Rental & Leasing; Utilities; Retail Trade; Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; Professional, Scientific & Technical Services; Arts, Entertainment & Recreation; Other Services(b); Management of Companies & Support Services; and Wholesale Trade.