National manufacturing survey finds weak job market to continue

RP news wires

In a national survey of U.S. manufacturing industry chief financial officers (CFOs) and senior comptrollers conducted by Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd., only 18 percent plan to increase hiring in the next six months, while 22% plan to decrease hiring. In addition, a large majority believe that the best way to create jobs is to cut corporate and personal tax rates and that the U.S. economy will not recover until the second half of 2011 or later.

“These findings are consistent with what we have been hearing from our manufacturing clients,” said Grant Thornton manufacturing practice leader Walter Gruenes. “It is clear that the strong productions gains experienced through the first half of 2010 have slowed significantly (only 2% growth in Q3) now that inventory re-stocking is complete and government incentive programs have expired (i.e. cash for clunkers, new homebuyer credit, etc.). In addition, the indecision stemming from a weak economy and the unknown impact of governmental tax policyand new healthcare, labor and environmental regulation on business and individuals is causing paralysis as it relates to major business decisions such as expansion, expenditures and hiring. Export growth is the one bright spot for manufacturers – growth of 9.5% in 2010 which is expected to reach 10% in 2011.”

Grant Thornton LLP conducted the biannual national survey from October 5 through October 15, 2010, with 516 U.S. CFOs and senior comptrollers participating, of which 99 were manufacturing companies. 

Over the next six months, do you expect the U.S. economy to:

                        Manufacturing                         All CFOs                    

Improve                      29%                             30%    

Remain the same         58%                             56%    

Get worse                    13%                             14%    


Over the next six months, do you expect your company’s financial prospects to:

                        Manufacturing                         All CFOs                    

Improve                       35%                             46%    

Remain the same         54%                             45%    

Get worse                    10%                             9%      


Over the next six months, do you expect prices or fees charged by your company to:

                        Manufacturing                         All CFOs

Remain the same         60%                             62%    

Increase                       35%                             31%    

Decrease                      5%                               7%      


Over the next six months, do you expect your headcount to:

                                    Manufacturing                         All CFOs

Remain the same         60%                             51%    

Increase                       18%                             28%    

Decrease                      22%                             21%    


Are you concerned about a double-dip recession?

Manufacturing                         All CFOs

Yes                               64%                            59%

No                               36%                             42%


When do you believe the U.S. economy will recover?

Manufacturing                         All CFOs

Later than 2011           43%                             42%

Second half of 2011    36%                             37%

First half of 2011         17%                             18%

Second half of 2010    3%                               3%


The best way to create jobs is:

                                          Manufacturing                         All CFOs

Cut corporate tax rate              40%                             35%

Cut personal income tax rates             27%                             29%

Tax credit for new hires           15%                            22%

Government stimulus programs 9%                           9%

R&D credits                              8%                            5%


About which type(s) of pricing pressure are you most concerned? (You may select more than one.)

                                                      Manufacturing                         All CFOs

Employee benefits                               80%                             84%

Raw materials (e.g., food, metals)       62%                             27%

Energy                                                 33%                             21%

Company Insurance

(not including healthcare)                    6%                               11%

Other                                                   2%                               13%

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