Economic Growth Continues; Manufacturing Growth Expected in 2016

Estimated reading time: 5 minutes

Respondents in non-manufacturing industries expect the prices they pay for materials and services will increase by 1.5 percent during 2016. They also forecast their overall labor and benefit costs will increase 2.3 percent in 2016. Profit margins are reported to have increased in the second and third quarters of 2015, and respondents expect them to increase between now and April 2016.

Two special questions were asked of our Panel. In response to the first question in which we asked the panel about the net impact to date on their organization's profits due to the sharply lower prices of oil and related commodities in 2015, non-manufacturing respondents indicated the following: "Negative" impact on organization's profits (9.3%); "Negligible" impact on organization's profits (43.0%); "Positive" impact on organization's profits (37.7%); and "Unsure" (9.9%). This indicates that, even though some of our respondents were unsure of the impact of lower oil prices, 80 percent felt lowered oil prices did not have a negative impact on their business.

In response to a second special question in which we asked the panel about the net impact on their organization's profits for the full year 2015 related to the strength of the U.S. dollar, non-manufacturing respondents indicated the following: "Negative" impact on organization's profits (10.7%); "Negligible" impact on organization's profits (56.0%); "Positive" impact on organization's profits (17.3%); and "Unsure" (16.0%). This indicates that, even though some of our respondents were unsure of the impact of a strong dollar, greater than 70 percent felt the strong dollar did not have a negative impact on their business. As it was with low oil prices, the impact was more likely inconsequential rather than positive.

• < Previous Page