Survey says manufacturers' concerns include raw material and energy costs


Feb 20, 2008

Prime Advantage, a buying consortium for small and mid-sized manufacturers, says findings from its Group Outlook Survey reveal that top economic concerns for manufacturers in 2008 include raw material and energy costs.   

The survey was conducted in January and polled Prime Advantage members on issues that will shape their economic plans in 2008.
About 46% of respondents agree that the cost of raw materials, including stainless steel, nickel, copper and other metals and plastics, is a major concern in 2008. Energy costs are the second-biggest concern, with 17.5%, and logistics and supply chain costs follow closely at 16.4%.
Inflation (8%), labor (4%), foreign competition (3.4%), overhead costs (2.8%) and health care costs (1.7%) are among the other concerns identified. 
More than rising energy costs or inflation, the uncertainty around pricing pressures for raw materials continues to be an obstacle to success for many small and mid-sized manufacturers.
The survey also found that 66% of Prime Advantage members plan significant capital improvements in 2008, including equipment upgrades such as press brakes, turret punch presses, as well as equipment for laser cutting, robotic welding and stamping. 
The results are supported by findings from the Business Roundtable's CEO Economic Outlook survey for the fourth quarter of 2007, in which CEOs were predicting a 35 percent increase in capital spending during the first six months of 2008. 
The Prime Advantage Group Outlook Survey identified a positive outlook for revenue expectations and hiring, with 59% indicating a revenue boost in 2008. Just 1% indicated that job cuts in 2008 could occur, whereas 23% are planning new hires and 76% are planning to keep their employee base at the same level as 2007.  
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