NEW YORK—July 25, 2011—From upgrading facilities to buying technology, industrial companies are confidently investing in their businesses to build upon a period of sustained growth, according to the results of ThomasNet’s newest Industry Market Barometer (IMB).
Nearly half (45 percent) of the companies responding report growth over the last six months of 2010, and 88 percent of those are confident in their future expansion. The survey reveals a set of specific strategies that fueled this growth, from customer retention efforts to movement into new markets and product development. Bolstered by the results of these strategies, respondents are investing more in their companies and recruiting talent in anticipation of increased customer demand.
Nearly 3,400 professionals participated in the latest IMB, a survey of buyers and sellers of industrial products and services, most of whom represent small and midsize businesses. The research looks at their performance, outlook, and strategies for success. Respondents include business owners and managers, sales and marketing executives, engineers, and purchasing agents from manufacturers, distributors and service companies in North America.
“Industrial buyers and sellers are busy collaborating in a way that is feeding and sustaining the sector’s growth, which bodes well for the overall economy,” said Eileen Markowitz, president, Thomas Industrial Network. “Successful companies are executing strategies that cultivate existing customer relationships and develop new business opportunities. Our data also shows that they’re relying heavily on the Internet to improve the effectiveness of these strategies.”
Core Strategies Drive Growth and Confidence
Despite the healthy growth being reported, survey respondents acknowledge the hurdles ahead of them. Interestingly, their initiatives and investments speak directly to their obstacles. Their top challenge (cited by 68 percent) is customers cutting back or going out of business, and they are addressing it by focusing on customer retention and service. Domestic competition is another challenge which respondents are tackling by competing more aggressively in core markets, and pursuing business in new industries and US geographies.
One example of a company that has used these strategies to succeed is Perfection Spring & Stamping Corp., a custom manufacturer of springs and wire forms, which recently received several project orders from the innovative automaker, Tesla. This win, in Perfection’s core automotive marketplace, comes as the company works to rebuild after the recession, when it experienced many customer losses. Perfection Spring has placed increased emphasis on customer service and bringing in new clients, leading to steady month-on-month growth.
Confidence Leads to Further Investment
Respondents’ priority initiatives through June 2011 demonstrate an expectation of increased demand. Two subsets of respondents emerge in this fourth IMB. The first are “Outperformers,” defined as those companies that not only grew in the last half of 2010 but also expect further growth by June 2011. A second group, “Optimists,” also expect growth by June 2011, despite business staying the same or declining in the last half of 2010. Companies from both segments are setting priorities and making investments – positioning themselves for more growth ahead.