A recent survey of U.S. industrial manufacturing companies showed continued optimism in the economy and positive growth expectations in several industries. The survey, which was conducted by Prime Advantage, revealed the financial projections and top economic concerns of midsized manufacturing companies.
The financial executives polled for the survey predict another impressive year is on the horizon for small and midsized industrial manufacturers, as 90 percent expect revenues to increase or match 2014. Much of this optimism can be attributed to strong order pipelines, with 50 percent of member companies seeing new orders exceeding the levels they saw at this time last year. In another encouraging result, 100 percent of respondents anticipate revenue growth with their key customers over the next three years.
Small and midsized manufacturing CFOs are placing greater focus on production this year, as an all-time survey high of 96 percent expect to procure manufacturing equipment in 2015. Other major purchases of note include 44 percent of respondents planning to buy computer hardware and software throughout the coming year.
Small and midsized manufacturing firms are still struggling to find qualified workers to help with ramping up as their industries look for growth. More than 70 percent of companies are experiencing difficulty finding capable employees in their markets, with most stating that this is due to insufficient levels of skilled employees in their area. Manufacturers are also concerned about maintaining morale and productivity within their existing workforce during this hunt for new talent.
Once again, price pressure from competition is the external factor causing the most anxiety for manufacturers, as three-fourths place this concern at the top. Customer demand is the second biggest apprehension, clocking in as a top fear for 67 percent of CFOs. This is the fourth consecutive year that price pressure from competition and customer demand ranked as the top two concerns. Distress over foreign competition cracks the top three for the first time in this survey’s history, most likely as a result of the strengthening U.S. dollar.
"In the race to achieve 2015 growth goals, our members and endorsed suppliers are strapping on their mental hardhats and crafting inventive solutions with inspired business strategies on a daily basis," said Louise O’Sullivan, founder, president and CEO of Prime Advantage. "Our members are leveraging digital tools, additive manufacturing and other advancements to operate more efficiently while building superior products."
Confidence in the U.S. economy among participating companies rose four points over last year, as half of respondents indicated that they are more optimistic about the U.S. economy compared to 2014. Notably this year, the CFOs’ expectations for their own companies’ financial prospects and for the U.S. economy have converged. For the past several years, significantly more CFOs expressed confidence in their own companies than in the economy overall. But there is now rising confidence in the U.S. economy with 50 percent expecting growth, a record for this survey.
For more information, visit www.primeadvantage.com.