Manufacturing & The Economy
InterOcean Advisors recently surveyed the top executives of major players in the manufacturing sector asking detailed questions about the state of the industry during the last twelve months and for predictions for the next twelve months. The surveyed companies operate production facilities in InterOcean’s key manufacturing verticals (aerospace & defense, automotive, building products, capital equipment, flow control, metals and plastics & packaging). Questions touched on revenue growth and growth drivers, M&A activity, changes in the business environment and perspectives on current and future market conditions.
Some key findings from the survey:
- Roughly 73% of manufacturers surveyed believe revenues will improve in the next twelve months with 16.4% expecting the increase to be by more than 5%.
- Very few respondents have seen reductions in costs over the past twelve months with only 14.5% seeing declines in raw material costs and 1.8% seeing declines in labor costs.
- M&A activity seems poised to escalate with more than twice as many respondents reporting plans to sell a business in the next twelve months compared to those that sold a business in the last twelve months.
- Nearly 30% of respondents believe entering new markets or producing new products has been their biggest growth driver in the past twelve months.
- Over 70% of respondents experienced no change in the amount of production outsourced in the last twelve months and no respondents indicated a change greater than 5% (in either direction).