Strong Revenues and Hiring for Remainder of 2015 Expected Among Midsized U.S. Manufacturers
Prime Advantage has announced the findings of its fourteenth Purchasing and Manufacturing Survey, revealing financial projections and top procurement insights of more than 750 U.S. manufacturing companies. The results reportedly show continued optimism about revenues and employment, as well as increasing demand for flexibility and responsiveness in supply chains. Confidence in growing revenues extends into 2016, according to the study.
After several consecutive years of climbing revenues, some manufacturing companies are starting to temper expectations. 80% 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% reported that they are currently performing below forecast for 2015. This slowdown may be temporary, as 83% 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.
Manufacturers remain optimistic about investment in their operations, as 87% of respondents are either meeting or exceeding capital expenditure plans for 2015, with 73% expecting current trends to continue throughout the remainder of the year. 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. 84% of the buying group’s members are prioritizing indirect spend to control costs.
Manufacturers continue to hire, as 61% of members went into 2015 planning to add new employees and 79% of those have already fulfilled this mission. This positive trend looks to continue for the remainder of the year, as no respondents are expecting layoffs and 47% expect to bring on additional employees.This result is consistent with the PwC Manufacturing Barometer's findings. A lack of qualified workers remains the top threat to manufacturing growth among members for the second consecutive year, with 46% voicing this concern (down from 53% in 2014). The three most desired traits for potential procurement hires are: analytical skills, negotiation expertise, and a strong acumen for relationship management.
“The survey results are extremely encouraging,” said Louise O’Sullivan, founder, president and CEO. “The majority of our members continue to achieve strong revenues and growth, even after concluding a string of very prosperous years. Our members are developing new products to increase demand like never before, and the power of our group intensifies every single year."
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