Prime Advantage announced the findings of its thirteenth edition of the Purchasing and Manufacturing Survey, revealing financial projections and top concerns of more than 700 U.S. industrial manufacturing companies. The results show continued optimism about revenues and employment, despite concerns about rising costs and a lack of qualified workers.
Forty-nine percent of respondents reported they expect revenues to increase in the second half of 2014 compared to the first half. Of these, 22 percent anticipate revenue growth will be more than 10 percent greater this year than last year, while 28 percent expect revenue growth of up to 10 percent.
Capital expenditures are expected to increase in the second half of 2014 for 42 percent of the midsized manufacturing companies in the group, an increase of twelve percent from 2013’s survey projections.
Fifty percent of companies expect to hire in the next six months and only one percent are predicting layoffs.
The cost of raw materials continues to be the main purchasing concern for members; the survey indicates an increased focus on process cost savings and efficiency. The top prediction for potential barriers to continued business growth is a lack of qualified workers at 53 percent.
Forty-nine percent of small and midsize manufacturers anticipate revenues will increase in the second half of 2014, an increase from the 42 percent that predicted a revenue increase in the last half of 2013. Just two percent believe they may be looking at a decrease in revenue up to 10 percent. Survey respondents indicate that improved customer demand (63 percent) will fuel this expected revenue increase.
Once again, capital expenditures appear to be on solid ground for the last half of 2014 among these small and midsized U.S. manufacturers, with 42 percent predicting an increase from 1H 2014 spending (a significant increase over the 30 percent of companies that planned to increase in capital expenditures over the final six months of 2013).
These numbers echo the August PMI, which increased to 1.9 percent to 59. A PMI of 50 or greater represents growth in manufacturing.
Half of all survey respondents are predicting new hires for their small and midsized manufacturing operations in the next six months (an increase of three percent from the 2H 2013 survey). Forty nine percent predict that hiring will match first half levels, with only one percent anticipating layoffs by year-end.