Most small and midsize manufacturers expect to beat their 2012 revenue numbers this year, and most indicate that the recent uptick in hiring will continue, as will the shift toward nearshoring.
Those are among the results of the 11th semiannual "Group Outlook Survey" conducted by Prime Advantage, a national buying consortium for manufacturers with annual revenues ranging from $10 million to $4 billion.
The survey, released earlier this month, found that:
- Sixty-eight percent of respondents expect revenues to increase in 2013 (compared with 72 percent in 2012).
- Eighty-seven percent of companies expect capital expenditures to grow or remain constant in 2013, with 39 percent planning to spend more.
- Forty-three percent of manufacturers plan to hire more employees in 2013 and 52 percent plan to maintain current employment levels.
- The cost of raw materials is a concern and is among the top cost pressures for 90 percent of manufacturers. The cost of health care was the second most frequently cited cost pressure.
More than half of the respondents — 61 percent — indicated that new product lines will drive anticipated revenue increases, while 57 percent cited stronger demand.
Although the number of manufacturers expecting to hire more workers is down slightly from 2012 — 43 percent this year versus 56 percent last year — the number remains much higher than it was in 2010, when only 24 percent of manufacturers were hiring.
Nearshoring on the Rise
The survey reinforced recent studies indicating that a growing number of U.S. manufacturers are bringing factories and sourcing closer to home, a trend known as "nearshoring."
In the past 12 months, one in five respondents have relocated international sourcing closer to the United States, according to the Prime Advantage survey.
More than 70 percent of respondents said they have increased their purchases of materials and services from American suppliers and service providers.
Nearly 28 percent of manufacturers said they have relocated sourcing to Mexico.
What's driving nearshoring? Some 67 percent of manufacturers cited shorter lead times, while 49 percent pointed to lower inventories.
Among other benefits of nearshoring, 40 percent of companies cited better supply chain control, while 39 percent pointed to better overall communication.