A recent survey of U.S. industrial manufacturing companies indicated continued optimism about revenues and employment despite concerns about rising costs and a lack of qualified workers. The survey, which was conducted by Prime Advantage, revealed financial projections and top concerns of more than 750 small and midsized manufacturers.
The results of the survey showed that 49 percent of respondents expect revenues to increase in the second half of 2014 compared to the first half. Of these, 22 percent anticipate revenue growth will be more than 10 percent greater this year than last year, while 28 percent project revenue growth of up to 10 percent. Survey respondents reported that improved customer demand will fuel this predicted revenue increase.
Capital expenditures are also expected to increase in the second half of 2014 for 42 percent of the midsized manufacturing companies in the group, an increase of 12 percent from 2013's survey projections.
Employment up in Manufacturing
Half of all survey respondents are predicting new hires for their small and midsized manufacturing operations in the next six months, an increase of 3 percent from the 2013 survey. Forty-nine percent predict that hiring will match first half levels, with only 1 percent anticipating layoffs by year-end.
Top Concerns
Procurement professionals continue to cite the cost of raw materials as their top purchasing concern for the second half of 2014. Processes and efficiencies within purchasing were the second greatest purchasing concern, followed by the cost of baseline materials for components, such as oil and gas. When asked to identify the top three cost pressures for the last half of 2014, respondents cited raw materials, health-care costs and labor costs.
Lack of Quality Workforce
Survey respondents identified the top barriers to business growth over the next 12 months as being a lack of qualified workers (53 percent), legislative and regulatory pressures (45 percent), and foreign competition (30 percent).
"Our members are making some of the highest projections for the next six months that we've ever seen," said Louise O'Sullivan, founder, president and CEO of Prime Advantage. "Revenue forecasts, capital expenditure plans and labor force expectations are all at record levels. Our members are becoming more energy efficient, more sustainable and more technologically advanced. This is all a true testament to the invaluable supply chain partnerships and resources created through our group's collaboration as we march in unison to make an everlasting impact in the world of manufacturing that will be built upon for generations to come."
Methodology
In August 2014, Prime Advantage surveyed purchasing executives and professionals from companies with annual revenues ranging between $10 million and $4 billion, of which the majority ranges between $20 million and $500 million. The survey received 82 responses from top professionals representing U.S.-based manufacturers in more than 25 different industries, including commercial food-service equipment, packaging, truck and trailer, material handling, food processing and construction equipment.
For more information, visit www.primeadvantage.com.
