Senior management at U.S. manufacturing companies is once again optimistic, according to a Grant Thornton LLP November survey. Nearly half (49%) believe the U.S. economy will improve in the next six months, and the same amount (49%) say they plan to increase staff during the same period.
Manufacturing leaders are also optimistic about their own businesses, with 81% feeling optimistic about their companies’ growth over the next six months.
“This is consistent with what manufacturers are telling us as we are out in the marketplace talking with them” said Wally Gruenes, Grant Thornton’s national managing partner for Consumer and Industrial Products. “Despite reduced staffing levels and stricter customer mandates, manufacturers have improved their performance over the past three years in areas such as production cycle time, on-time delivery rate, scrap and rework, quality and warranty costs.”
“In addition, the uncertainty surrounding some major concerns (tax rates, R&D credit extension, environmental standards, etc.) that paralyzed businesses over the past two years have been partially resolved, which sets the table for stable growth in manufacturing over the next two years. This, coupled with the highest level of cash on corporate balance sheets in over 50 years, bodes well for increased investment by the industry. In fact, 47% of manufacturers expect to increase purchases of capital equipment, 47% expect to embark upon process improvement initiatives and 37% expect to spend on information technology.”
About the Grant Thornton Business Optimism Index
The Grant Thornton Business Optimism Index, a quarterly survey of U.S. business leaders, comprises three measures:
• U.S. economy: Business leaders’ perceptions of whether the U.S. economy will improve, remain the same or deteriorate in the next six months.
• Business growth: Business leaders’ perceptions about the growth of their own businesses over the next six months.
• Hiring expectations: Whether business leaders expect the number of people their companies employ to increase, remain the same or decrease in the next six months.
The survey was conducted Nov. 3-16, 2010, with 63 senior executives from U.S. manufacturing companies. To see all the survey findings, please visit www.GrantThornton.com/BOI.