After these last two years, it’s tough to imagine business headlines hinting at prosperity the way they did pre-pandemic, but according to an analysis by the Institute for Supply Management, that’s exactly what they’re doing. (Read about it here.)
For many of us, it may seem like there is finally a steady light shining at the end of a very long and dark tunnel — one from which we are all eager to emerge unscathed — and with good reason. ISM’s December 2021 economic forecast also included these glimmers of hope:
- Revenues are expected to increase in 15 of 18 manufacturing industries and 17 of 18 service sector industries.
- Capital expenditures are expected to increase by 7.7 percent in manufacturing (a slight dip from the 12.1 percent increase in 2021), and by 10.3 percent in the services sector.
- The manufacturing employment base is expected to grow by one percent (after a 3.3-percent increase in 2021).
- Sixty-five percent of respondents expect greater revenues in 2022 than 2021 in the manufacturing sector, and 15 of 18 manufacturing industries expect revenue to improve. Among the industries expected to benefit are machinery; computer and electronic products; fabricated metal products; transportation equipment; primary metals; miscellaneous manufacturing; chemical products; and electrical equipment, appliances and components. These industries in the services sector anticipate growth: mining; agriculture, forestry, fishing and hunting; construction; utilities; professional, scientific and technical services; other services; and transportation and warehousing.
- Manufacturing is returning to pre-pandemic levels, and capital expenditures are expected to increase.
- Employment is expected to grow.
- And, while the price of raw materials is expected to rise still (8.2 percent during the first five months), the percentage increase is lower than in 2020 (14.5 percent).
All of this is good news and points to a renewed need to step back, think big and plan for the future. If you have a business in one of these sectors but have held off on making critical purchases, now is the time to revisit your plans. You need to strike while the iron is hot, as they say, and if the reports we’re seeing are any indication, the iron is indeed hot.
We understand that there might be a bit of trepidation, which is why we strongly encourage you to speak to someone who is not so closely involved in your day-to-day operations. Someone who can provide an impartial point of view that comes from many years of hard-won experience.
Begin by talking to one of our excellent loan advisors, who will review all of your financing, help you look at the big picture, offer a fresh perspective on the pros and cons of your plans, and help you plan your next steps for a successful and prosperous 2022 and beyond!