Almost 40 percent are predicting a revenue increase in last half of 2009.
{mosimage} A recent survey of small and midsized industrial manufacturers reveals growing optimism among the sector.
Prime Advantage (www.primeadvantage.com), a group purchasing organization that serves midsized industrial manufacturers, announced on Sept. 2 the findings of its fourth Prime Advantage Group Outlook (GO) Survey, revealing the top economic concerns of mid-sized industrial manufacturers for the remainder of 2009.
Among the highlights of the survey findings, 80 percent of respondents indicated that they expected revenue for the second half of 2009 to either stay the same or increase. This is a dramatic turnaround from the GO Survey that was published in February, in which only 38 percent were predicting revenues to either stay the same as 2008 or increase. Also, just 31 percent said that capital spending would likely decrease from the first half of 2009, a marked improvement from January, when 66 percent of respondents indicating that capital spending would decrease from 2008 levels.
This turnaround in expectations is reflective of U.S. Department of Commerce data showing durable goods orders increased nearly 5 percent in July, and that they have steadily increased over the past few months. In addition, the Institute for Supply Management’s PMI (for Purchasing Managers’ Index) for August is also at its highest level in more than a year, and indicates that the manufacturing sector has achieved a growth mode for the first time in 20 months.
Survey data was collected in August from 96 representatives of industrial manufacturing companies, including business owners, vice presidents of procurement and purchasing professionals. The survey polled respondents on their projections for the next six months of the year, in comparison to the past six months.
“The results of the latest Group Outlook Survey show that small and midsized industrial manufacturers, across many sectors, are seeing new orders materialize after many months of slow activity due to challenging financial and economic conditions, as they capitalize on new product development and new market penetration,” said Louise O’Sullivan, president and founder of Prime Advantage. “With inventories lean, and reflective of demand, many manufacturers waited to replenish stock until as late as possible, but these results indicate that the recovery is starting to gain traction across a broad spectrum of our economy and that new orders are coming in.”
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