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%