Economic growth in the United States will continue in 2008, even though capital spending will slow, according to a survey of the nation's factory and business managers released on Tuesday.
The manufacturing sector is more optimistic about 2008, with revenue expected to grow 6.8 percent compared with 2 percent in the much bigger non-manufacturing sector, said the nation's purchasing and supply management executives in their December 2007 semiannual economic forecast.
"Manufacturing purchasing and supply executives are mostly optimistic about their organizations' prospects for the first half of 2008, and predict additional growth during the second half," said Norbert Ore, chairman of the ISM manufacturing business survey committee.
Ore characterized 2007 as "a good year overall," but one that had presented "significant challenges with regard to energy costs and overall inflation in manufacturing input costs."
He said respondents to the manufacturing survey expected cost pressures to subside in the second half of 2008.
Manufacturers expect employment in that sector next year to grow 1.6 percent, while labor and benefit costs are expected to increase an average of 2.5 percent.
Non-manufacturing supply managers "are cautiously optimistic about continued growth in the first half of 2008 compared to the second half of 2007," said Anthony Nieves, chairman of the ISM non-manufacturing business survey committee.
Non-manufacturers predicted that their employment will grow by a slim 0.5 percent during 2008.
One weak point, according to the forecasts, appeared to be the capital spending. On the manufacturing side, spending is seen inching up 0.7 percent next year, while it is expected to contract 6.3 percent in the non-manufacturing sector.
The projections were part of the forecast issued by the business survey committee of the Institute for Supply Management.