Manufacturing executives anticipate an 8.4 percent revenue increase this year, a significant jump from the 4.4 percent growth projected in December. With capacity utilization holding at 86.9 percent and capital expenditures expected to rise by 4.9 percent, the sector remains resilient. Susan Spence, chair of the ISM Manufacturing Business Survey Committee, noted that consistent performance across 14 manufacturing industries points toward a healthy second half of the year, even as raw material prices continue to climb.

The services sector continues to lead the broader economy, with revenue growth forecasts reaching 8.6 percent. Steve Miller, chair of the ISM Services Business Survey Committee, highlighted that services firms are operating at 91.3 percent capacity. While employment gains remain modest in both sectors, businesses are actively adjusting their strategies to manage input costs. Faced with tariff uncertainty and an oil price shock, companies are increasingly shifting inventory strategies and reassessing supply chains, though most report that artificial intelligence has yet to significantly alter their hiring or layoff decisions.