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Outlook is Up for Mid-sized Manufacturing in the United States

Mid-sized U.S. Manufacturers Expect to See Strong Revenues, Hiring for Remainder of 2015. A survey of more than 750 U.S. manufacturers shows continued optimism about revenues and employment as well as increasing demand for flexibility and responsiveness in supply chains. Moreover, confidence in growing revenues extends into 2016.

Among other findings of the survey, conducted by Prime Advantage, a buying group for industrial manufacturers:

  • Eighty percent of respondents expect to be at or above previous year’s revenues, and 83 percent anticipate maintaining or increasing revenue performance in 2016.
  • Eighty-four percent of the buying group’s members are prioritizing indirect spend to control costs.
  • Hiring is strong, as 61 percent of members planned to hire new employees in 2015.
  • A lack of qualified workers remains the top threat to manufacturing growth among members for the second consecutive year, with 46 percent voicing this concern, down from 53 percent in 2014.
  • The three most desired traits for potential procurement hires are: analytical skills, negotiation expertise and a strong acumen for relationship management.

Revenues look to remain strong for the rest of 2015

After several consecutive years of climbing revenues, some manufacturing companies are starting to temper expectations. Eighty percent of respondents expect to be at or above the previous year’s revenues. Although this remains a significant portion, it is the lowest percentage of optimists in this category since 2010. With demand decreasing for some members, 27 percent reported that they are currently performing below forecast for 2015. This slowdown may be temporary, as 83 percent of members expect to either maintain or increase revenue performance in 2016. Respondents currently enjoying revenue upswings largely credit new product lines and new customers for the growth.

Capital expenditures holding steady

Manufacturers remain optimistic about investment in their operations as 87 percent of respondents are either meeting or exceeding capital expenditure plans for 2015, with 73 percent expecting current trends to continue throughout the remainder of the year.

Cost pressures threaten bottom line

Once again, raw materials top the list of leading cost pressures for procurement professionals. Indirect materials and supplies, as well as component parts pricing, have also been significant margin-threatening factors for manufacturers this year.

Employment outlook is promising

Manufacturers continue to hire as 61 percent of members went into 2015 planning to add new employees; with 79 percent of those having already fulfilled this mission. This positive trend looks to continue for the remainder of the year, as no respondents are expecting layoffs and 47 percent expect to bring on additional employees. This result is consistent with the PwC Manufacturing Barometer’s findings.

Source: Prime Advantage
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