Midsize Manufacturers See More Revenue, Spending and Hiring Ahead for Remainder of 2013
Issue: August 2013, Posted Date: 9/18/2013
Nearly all of the manufacturers responding to a survey about their outlook for the remainder of 2013 indicated that they expect their second-half revenues to be better than or equal to the first half of 2013.
That was one of the positive findings from Prime Advantage's 12th semiannual Group Outlook Survey, which reveals the financial projections and top concerns of its member companies for the rest of 2013.
The survey results show continued optimism about revenues and employment despite concerns about federal regulations and fiscal policy uncertainties.
"Our members continue to make strides in growing their businesses, which is evident from their projections for the second half of the year," said Louise O'Sullivan, founder, president and CEO of Prime Advantage, a buying consortium for midsize manufacturers.
A record number (47 percent) of small and midsize manufacturers said they expect to hire in the next six months, according to the survey results.
Meanwhile, less than 3 percent of respondents said they plan to reduce their employment ranks.
Ninety-seven percent of respondents said they expect revenues to be better than or equal to the first half of 2013, including 42 percent that anticipate revenue growth to be higher than the first half.
A surge in customer demand (55 percent of the vote) and new-product launches (48 percent) were most often cited as the reasons for the expected increase.
With more money coming in, companies appear to be spending more. One in three companies indicated that they plan to increase their capital expenditures in the second half.
Cost of Raw Materials, Health Care Are Top Concerns
Procurement professionals continue to cite the cost of raw materials as their top area of focus, but to a lesser degree than seen in prior surveys. Some 63 percent of respondents expressed concern about upward cost pressure on raw materials, down from 90 percent in February 2013.
Cost pressure associated with health care is a nagging issue, with 61 percent of respondents expressing concern, up from 57 percent in the February survey.
The top barriers to growth over the next 12 months, according to the survey results, are legislative and regulatory pressures (47 percent); oil and energy pricing (39 percent); and the lack of qualified workers (32 percent).
The results are based on an August survey of purchasing professionals representing durable-goods manufacturing firms with annual revenues between $10 million and $4 billion.