U.S. Economy Seen Expanding Through 2026: Institute for Supply Management

The U.S. economy continues to battle the headwinds posed by trade issues, continued inflation concerns and geopolitical uncertain. The result, the nation's supply and purchasing execs say, is the U.S. economy is expected to expand for the remainder of 2026.

The forecast is contained in in the Spring 2026 ISM Supply Chain Planning Forecast.

In the manufacturing sector, Revenue for 2026 is expected to increase, on average, 8.4%. This is 4 percentage points higher than the December 2025 forecast of 4.4%, and 5.9 percentage points higher than the 2.5
percentage point year-over-year increase reported for 2025. Eighty-two percent of respondents say revenues for 2026 will increase, on average, 12.7% compared to 2025.

Seventeen percent say revenues will decrease (12%, on average), and zero percent indicate no change. With an operating rate of 86.9%, a projected 4.9% increase in capital expenditures, a 14.1% increase in prices paid for raw materials and a marginal (1.4%) increase in employment expected by the end of 2026, the manufacturing sector will continue to grow through 2026.

“With 14 manufacturing industries expecting revenue growth and seven industries expecting employment growth in 2026, panelists forecast
a healthy rest of the year. Sentiment in each industry was generally consistent with performance reports in the May 2026 Manufacturing ISM PMI Reports, as well as the fall ISM Supply Chain Planning Forecast released in December,” says Susan Spence, Chair of the ISM Manufacturing Business Survey Committee.

Services Summary
Respondents expect 8.6% growth in revenues in 2026, 4 percentage points higher than the 4.6% increase forecast in December 2025. Eighty-one percent of respondents say revenues for 2026 will increase, on average, 12.9% compared to 2025. Meanwhile, 15% expect their
revenues to decrease (11.3%, on average), and 4% indicate no change.

“The services sector will continue to lead the economy in 2026. Services companies are currently operating at 91.3% of normal capacity. Supply managers indicate that prices are expected to increase 8.9% over the year,
reflecting increasing inflation. Employment is projected to grow only slightly (0.9 percentage point). Sixteen industries forecast increased revenues, the same as predicted in in December 2025,” says Steve Miller, CPSM, CSCP, Chair of the ISM Services Business Survey Committee.