December 29, 2006
Confidence of U.S. manufacturers declines
By Staff
Small and medium-sized manufacturers say material costs are their top concerns for business prospects over the next 12 months, replacing the finding of qualified help, according to the most recent survey by International Profit Associates Small Business Research Board.
The survey showed the IPA SBRB Manufacturing Confidence Index fell to 43.2, a drop of 1.8 points from an index of 45 reported in August, but it’s still higher than the IPA Small Business Confidence Index (IPA SBCI) of 42.7 recorded in the latest national survey of all business owners and managers.
Health care costs, taxes and government regulation follow the cost of materials as the leading issues. Energy and fuel costs are now fifth. The IPA SBRB has been tracking the attitudes of small businesses since July 2004. This is the second consecutive quarter that results for the manufacturing sector have been reported. The key ingredients for determining the confidence index are attitudes about the direction of the economy, revenue predictions and hiring plans.
Manufacturers are projecting revenues to increase over the next 12 months but most of them don’t believe they’ll be adding employees over that time period; 53 percent said staffing levels will remain the same and 7 percent said they’d cut staff.
"The forecast for increased revenues would ordinarily accompany projections for increased hiring. That is not the case here. It seems evident that there is going to be significant pressure on maintaining cost control and boosting productivity in order to meet profit goals," said Gregg Steinberg, president of International Profit Associates, the largest privately-held provider of management consulting and professional services to small and medium-size businesses in North America.
The survey showed the IPA SBRB Manufacturing Confidence Index fell to 43.2, a drop of 1.8 points from an index of 45 reported in August, but it’s still higher than the IPA Small Business Confidence Index (IPA SBCI) of 42.7 recorded in the latest national survey of all business owners and managers.
Health care costs, taxes and government regulation follow the cost of materials as the leading issues. Energy and fuel costs are now fifth. The IPA SBRB has been tracking the attitudes of small businesses since July 2004. This is the second consecutive quarter that results for the manufacturing sector have been reported. The key ingredients for determining the confidence index are attitudes about the direction of the economy, revenue predictions and hiring plans.
Manufacturers are projecting revenues to increase over the next 12 months but most of them don’t believe they’ll be adding employees over that time period; 53 percent said staffing levels will remain the same and 7 percent said they’d cut staff.
"The forecast for increased revenues would ordinarily accompany projections for increased hiring. That is not the case here. It seems evident that there is going to be significant pressure on maintaining cost control and boosting productivity in order to meet profit goals," said Gregg Steinberg, president of International Profit Associates, the largest privately-held provider of management consulting and professional services to small and medium-size businesses in North America.
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