Survey: Manufacturing Confidence Rising

Washington, DC, August 8, 2007--Confidence is rising for both large and small manufacturing companies says the second-quarter survey by The National Association of Manufacturers (NAM)/Industry Week.

Confidence dropped in each of the previous four quarters.

“Industry’s great untold story is that confidence among large and small manufacturers is on the rise,” said David Huether, the NAM’s chief economist. “While it hasn’t returned to the heights of two years ago, there’s a notable improvement from the first quarter of this year. This is the first time in a year and a half that the business outlook improved for both large and small manufacturers.”

The survey of 293 NAM member companies showed 80% of large and 79% of small manufacturers eyeing a positive business outlook for the second quarter of 2007. This is a jump from the 78 and 77% of large and small respondents reporting a positive business outlook for the first quarter of this year. 

Large manufacturers, those employing over 1,000 workers, and small companies, less than 1,000 workers, also noted their business outlook as well as their 12-month expectation on sales, prices, capital investment, inventories, employment and wages.

Both large and small manufacturers expect their sales to continue growing. Small firms expect their sales to increase by 3.9%. This is a slower pace than the 4.3% expectation in the first quarter as well as slower than the average expectations from 2004 through 2006. Large firms expect their sales to increase by a 4.5% over the next 12 months, an improvement from the first quarter.

Both large and small manufacturers expect their pricing power to increase by about 2%. This is an increase for both small and large firms compared to the first quarter of 2007, signaling that demand is picking up.

Large and small manufacturers expect their capital expenditures to rise by about 2.3%. This is similar to their expectations in the first quarter.

Both large and small survey respondents expect to reduce inventory levels and increase employment over the next 12 months. They also expect wages to rise modestly.

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