30. September 2016
Prime Advantage, a buying consortium for midsized manufacturers, recently released findings of its annual purchasing and manufacturing survey, which reveals financial projections and top procurement insights of more than 750 U.S. manufacturing companies. Overall, healthy revenue, spending and hiring data for the rest of 2016 and the year ahead were reported.
Specifically, results reveal continued optimism about revenues and employment, increasing demand for flexibility and responsiveness in supply chains and confidence in growing revenues extending into 2017.
Here are some other key findings:
- The challenges of filling open positions remains a key barrier to growth for nearly half of Prime Advantage manufacturers
- 97 percent of manufacturers’ project revenues will increase or stay at the same level in the next 12 months
- 95 percent of the procurement professionals responding to the survey said that raw materials price pressures were their top cost pressure concern
- 89 percent of manufacturers expect their headcount to grow or remain the same through the end of the year
- Savings on components in certain areas are eluding the majority of manufacturers because of time and resource constraints in engineering departments
According to the Prime Advantgae, the survey shows that 2017 will start out strong for manufacturing, with 97 percent expecting revenue to either increase or stay the same in the next 12 months. Overall revenue expectations for the remainder of 2016 find 84 percent expecting to improve upon or match 2015. Among the 16 percent expecting this year’s revenues to come in under the previous year, the overwhelming reason is decreased customer demand. Among the respondents predicting growth, 58 percent indicated that new products are driving the increase. Bringing on new customers is the second most significant reason for increasing revenues, at 23 percent.
Investing in business operations has been a priority for 2016, as 86 percent of manufacturers are at or above plan for capital expenditures. Most respondents expect to continue spending; as 81 percent believe capital spending will increase or remain at current levels for the balance of the year.
For the third year in a row, respondents selected a lack of qualified workers as the biggest external barrier to business growth, listed by 48 percent.
An unusual political environment is creating anxiety, as 42 percent of manufacturers responded that uncertainty in the federal elections could stymie growth. Concern over legislative and regulatory pressures continues to crack the top three barriers at 35 percent, although it has become less acute each of the last three years.
Fifty-seven percent of strated 2016 with plans to hire, and almost all of these have already followed through on those intentions, as 51 percent have increased headcounts. More good employment news is to come as 40 percent of participants said they plan to hire before year’s end. Click here for full report.