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The economic woes that have adversely affected U.S. manufacturing in 2008’s second half will continue to do so in 2009, according to the Institute for Supply Management’s (ISM) semi-annual economic forecast.

Annual manufacturing revenues are expected to decline in 12 of 18 industries, with a net 1.1 percent year-over-year decrease projected for 2009. Industries forecasting a revenue decline include primary metals, fabricated metal products, textile mills, machinery, paper products, furniture and related products, transportation equipment, and plastics and rubber products. Sectors projecting an increase include petroleum and coal products, electrical equipment, appliances and components, food products and chemicals.

Manufacturers also expect their capital expenditures to decrease by 6.7 percent next year compared with a 5.9 percent increase for 2008. In addition they plan to reduce inventories to decrease their purchased inventory-to-sales ratio and cut employment by 2.7 percent, although their labor and benefits costs likely will increase an average of 1.9 percent.

Nonetheless, manufacturers are hopeful 2009’s latter half will bring a more robust economy and, in turn, more business.

“Manufacturing purchasing and supply executives lack their usual optimism about their organizations' prospects as they consider the first half of 2009, [but] are somewhat more positive about the second half,” said Norbert Ore, chairman of ISM’s manufacturing business survey committee, in a prepared statement. “While 2008 has been a challenging year overall, we are apparently seeing a rapid halt to the inflationary cycle of the past several years as it relates to manufacturing inputs.”