A recent survey reveals manufacturers to be slightly more optimistic about the economy than other industries, though many are still cutting costs.
{mosimage} A majority of manufacturers believe that the U.S. economy will improve during the next six months, but only 25 percent say their company will increase hiring during that period, and more than half (57 percent) plan to reduce bonuses.
Those were among the results of a recent survey of manufacturing chief financial officers (CFOs) and senior comptrollers conducted by Grant Thornton LLP (www.GrantThornton.com), the U.S. member firm of Grant Thornton International Ltd. With 54 percent of manufacturing executives expecting an improving U.S. economy over the next six months, manufacturing is slightly more optimistic than other industries, Grant Thornton said. On a national basis, 49 percent of executives across all industries surveyed said they expect economic improvement in the six-month timeframe.
About one-third of manufacturers (34 percent) in the survey said they are reducing health care benefits, and more than a quarter (28 percent) are reducing 401(k) matches. In terms of pricing pressure, manufacturers are most concerned about the cost of employee benefits (74 percent), such as health care and pension costs. Not surprisingly, the second greatest concern is the cost of raw materials (63 percent).
Bottomed out?
“Most of our clients are telling us that they have hit bottom and are now seeing an uptick in their orders,” said Walter Gruenes, Grant Thornton national managing partner of Consumer and Industrial Products. “In the short term, those manufacturers serving the food/beverage, aerospace and chemical sectors are most optimistic, while those serving the automotive, industrial equipment and housing/construction sectors are least optimistic. Over the next five years, the machinery, chemicals, aerospace, food/beverage and metals sectors are expected to experience the largest employment gains.”
Grant Thornton conducted the biannual national survey from Sept. 21 through Oct. 2, 2009, with 846 CFOs and senior comptrollers from public and private companies, of which 154 were from manufacturing.
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