NAM outlook: Overall industry confidence rising

The National Association of Manufacturers (NAM)/ Industry Week business outlook survey for Q2 2007 points to confidence edging up from both large and small companies, after declining during the prior four quarters.

“Industry’s great untold story is that confidence among large and small manufacturers is on the rise,” says David Huether, NAM’s chief economist. “While it hasn’t returned to the heights of two years ago, there’s a notable improvement from the first quarter of this year. This is the first time in a year and a half that the business outlook improved for both large and small manufacturers.”

The survey of 293 NAM member companies showed 80 percent of large and 79 percent of small manufacturers eyeing a positive business outlook for the second quarter of 2007.

Large manufacturers—those employing more than 1,000 workers—and small companies—less than 1,000 workers—recorded their business outlook as well as their 12-month expectation on sales, prices, capital investment, inventories, employment, and wages.

Survey highlights:

Sales Expectations .through 2006.  Large firms expect their sales to increase by a more-robust 4.5 percent over the next 12 months.  This is an improvement from the first quarter. 

Pricing Expectations .t quarter of 2007, signaling that demand is picking up.

Investment Expectations .

Inventory Expectations .ve quarter that firms expect to reduce inventories.  For small companies, this is the second consecutive decline following very modest increases in inventory investment expectations in 2006.  

Employment Expectations .n of a modestly positive long term trend.  Since the second quarter of 2005, both large and small survey respondents have had positive employment expectations.  

Wage Expectations .ease by a stronger 2.3 percent over the coming year.  This is stronger than the 2 percent increase anticipated last quarter and slightly stronger that the 2.2 percent increase expected from 2004 through 2006. 

The NAM/Industry Week Manufacturing Index is at www.nam.org/manufacturingindex

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