Significantly, most manufacturing leaders responding to the consulting firm's quarterly Business Optimism Index survey were also optimistic about their own businesses, with 81 percent of the feeling optimistic about their companies' growth over the next six months and half (49 percent) saying they plan to increase staff in the next six months.
"This is consistent with what manufacturers are telling us as we are out in the marketplace talking with them," said Wally Gruenes (LinkedIn), Grant Thornton's national managing partner for consumer and industrial products. "Despite reduced staffing levels and stricter customer mandates, manufacturers have improved their performance over the past three years in areas such as production cycle time, on-time delivery rate, scrap and rework, quality and warranty costs."
Gruenes added that the uncertainty surrounding some major concerns — such as tax rates, R&D credit extension and environmental standards — that paralyzed businesses over the past two years have been partially resolved, which sets the table for stable growth in manufacturing over the next two years.
"This, coupled with the highest level of cash on corporate balance sheets in over 50 years, bodes well for increased investment by the industry," Gruenes said. "In fact, 47 percent of manufacturers expect to increase purchases of capital equipment, 47 percent expect to embark upon process improvement initiatives and 37 percent expect to spend on information technology."
Results of the Business Optimism Index follow:
|Believe U.S. economy will improve
|Believe U.S. economy will get worse
|Very or somewhat optimistic about own business
|Very or somewhat pessimistic about own business
|Plan to increase staff
|Plan to decrease staff
|Are you concerned about a double-dip recession?
Grant Thornton's Business Optimism Index is a quarterly survey of US business leaders, measuring business leaders' perceptions of whether the nation's economy will improve, remain the same or deteriorate in the next six months; their perceptions about the growth of their own businesses over the next six months; and whether they expect the number of people their companies employ to increase, remain the same or decrease in the next six months.
The most recent survey was conducted November 3-16, 2010, with 63 senior executives from US manufacturing companies. More on the survey findings is available at www.GrantThornton.com/BOI.