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Midsized manufacturers are projecting healthy revenues, strong hiring and capital spending plans for the second half of 2012, based on a recent survey by Prime Advantage. However, for a small portion of manufacturers, these plans may see delays due to uncertainty about the results of the federal elections.
According to the survey, 48 percent of respondents expect to see their revenues increase from the first half of 2012. An overall increase in customer demand was named the primary reason for the revenue growth in 58 percent of responses, followed by the introduction of new product lines.
Capital spending is also set to increase for one-third of polled companies in the second half of 2012, an upward trend from a year ago, when only one-quarter of respondents budgeted an increase in capital spending.
In addition, midsized manufacturing companies expect to increase new hires at a greater rate in the second half of 2012 as compared to the same period in 2011. Overall, 90 percent of polled companies plan to keep or increase the number of domestic employees, and 39 percent expect to fill open positions in 2012. On average, more medium-sized manufacturing companies expect to hire in the second half of 2012 (39 percent) as compared to the same period in 2011 (36 percent).
When asked to indicate the top-three cost pressures causing the most concern, respondents most frequently cited the cost of raw materials. However, for the past three surveys, manufacturers have expressed lessening concern about raw material costs, relative to other cost pressures, with only 76 percent of respondents including raw materials in their top-three choices.
Yet over the past year, respondents have expressed more intense concern about cost pressure from health-care benefits. The cost of medical care was voted the second greatest cost concern for manufacturers by nearly 60 percent of respondents. Only a year ago, concerns about health-care costs were in fourth place.
Of those who hold an opinion about whether the uncertainty with federal elections will cause a delay to business processes, 29 percent and 33 percent are seeing delays in employment and capital spending, respectively. When asked about the level of impact the outcome of the presidential election could have on the economy and unemployment, a majority (55 percent) of respondents believed the impact on the economy would be felt greatly, and 43 percent predicted an impact on unemployment.
“We are looking at a stronger 2012 year end for midsized manufacturers than a year ago,” said Louise O’Sullivan, CEO of Prime Advantage. “Today, while there are clearly mixed sentiments about the economy, more surveyed midsized manufacturers expect increases in revenues, capital investments and hiring than a year ago — all great indicators of a continued recovery for the manufacturing economy.”
For more information, visit www.primeadvantage.com.