Study finds optimism among mid-sized manufacturers

Prime Advantage report shows hiring, capital expenditures will rise in 2013

03/06/2013


In its semi-annual Group Outlook Survey, manufacturing buying consortium Prime Advantage said its members are showing great optimism for growth in 2013 despite pressures over raw material and healthcare costs.

 

Among the study’s findings:

 

  • 68% of respondents expect revenues to increase in 2013
  • 87% of companies expect capital expenditures to grow or remain constant in 2013, with 39% planning to spend more than 2012 levels
  • 43% of companies plan to hire more employees in 2013 and 52% plan to maintain current employment levels. This is higher than the 39% that indicated they would be hiring in the second half of 2012

The cost of raw materials is a concern and is among top cost pressures for 90% of manufacturers

 

“We are encouraged to see that our members expect to see growth in 2013, after a very strong 2012 for most,” said Louise O'Sullivan, founder, president and CEO of Prime Advantage. “As they focus on profitability and margins, we look forward to partnering with both Members and Endorsed Suppliers to fuel the bottom line, reflecting Total Cost of Ownership, along with the top line, greater sales and market share."

 

 

 

Anticipating strong revenue and capital spending

 

Most small and midsized manufacturers expect to beat strong revenues of 2012, with 68% of respondents anticipating an increase in sales in 2013. New product launches are the main reason for expected revenue increases, cited by 61%, followed by an expected increase in overall customer demand, cited by 57%.

 

Capital expenditure planning remains healthy, as in the previous two years, with 39% of respondents planning an increase from 2012 levels.

 

 

 

Employment continues to grow

 

Manufacturers’ hiring plans remain in expansion mode, with 43% planning to hire more workers this year. Although this number is slightly down compared with 2012, when 56% of respondents planned hiring, it remains significantly above expectations in 2010, when only 24% of companies were hiring.

 

The top concern of 2013, the cost of raw materials, is also a leading cost pressure concern. More than 90% of respondents included raw materials in their top three cost pressure concerns and 42% cited this concern in the leading position. However, it is encouraging that this seems to be declining, relative to recent surveys.

 

Healthcare costs moved back into second place among top cost pressure concerns, with 57% of respondents including it in the top three. And in 2011, healthcare costs were cited as the fourth-greatest concern among small and midsized manufacturers.

 

The cost of base materials for components, although still in third place, was cited by fewer respondents as a concern than in prior years.

 

 

 

Nearshoring is here

 

Companies are seeking the benefits of near-shoring. In the past twelve months, more than one-in-five respondents have brought international sourcing closer to United States. These results are similar to the Grant Thornton Study on Nearshoring, where 25% of respondents indicated they brought sourcing closer to the U.S.

 

More than 70% of respondents have increased material and service purchases from American suppliers and service providers. Mexico is the second choice for sourcing, with nearly 28% of respondents moving sourcing to that region. The most frequently cited benefits that manufacturers hope to see in nearshoring are shorter lead times, as indicated by 67% of respondents, and lower inventories (49%). Among other benefits, companies cited better supply chain control (40%) and better overall communication (39%).

 

 

 

 



No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
Your leaks start here: Take a disciplined approach with your hydraulic system; U.S. presence at Hannover Messe a rousing success
Hannover Messe 2016: Taking hold of the future - Partner Country status spotlights U.S. manufacturing; Honoring manufacturing excellence: The 2015 Product of the Year Winners
Inside IIoT: How technology, strategy can improve your operation; Dry media or web scrubber?; Six steps to design a PM program
Getting to the bottom of subsea repairs: Older pipelines need more attention, and operators need a repair strategy; OTC preview; Offshore production difficult - and crucial
Digital oilfields: Integrated HMI/SCADA systems enable smarter data acquisition; Real-world impact of simulation; Electric actuator technology prospers in production fields
Special report: U.S. natural gas; LNG transport technologies evolve to meet market demand; Understanding new methane regulations; Predictive maintenance for gas pipeline compressors
Warehouse winter comfort: The HTHV solution; Cooling with natural gas; Plastics industry booming
Managing automation upgrades, retrofits; Making technical, business sense; Ensuring network cyber security
Designing generator systems; Using online commissioning tools; Selective coordination best practices

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role that compressed air plays in manufacturing plants.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me