The ISM semi-annual economic forecast also showed that companies expect a small increase in employment across both sectors, after a contraction in 2016.

"On the whole we're looking at a positive year," said Bradley Holcomb, chair of the ISM Manufacturing Business Survey Committee, which releases a monthly survey of industry purchasing managers.

Manufacturers are expecting revenues to accelerate 4.6 percent next year, after a meager increase of less than 1 percent this year. Meanwhile, labor and benefits costs and prices of inputs are expected to rise only modestly in 2017, 2.5 percent and 1.3 percent, respectively.

“These two represent the lion’s share of the cost of manufacturing” so with the expected jump in revenue it means “profit margins will open up and make our companies even healthier as we go forward,” Holcomb told AFP.

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