By Susan Avery
Generally optimistic about revenues and employment, procurement executives at midsized manufacturers are demanding flexibility and responsiveness in supply chains. That’s according to results of the 14th Purchasing and Manufacturing Survey of U.S. manufacturing companies by Prime Advantage, the buying consortium.
The survey’s findings show:
After several consecutive years of climbing revenues, some manufacturing companies are starting to temper expectations, survey results show. Eighty percent 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% report 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.
According to the Purchasing and Manufacturing Survey, 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.
Once again, 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.
News on the jobs front is good. Manufacturers continue to hire as 61% of members went into 2015 planning to add new employees; 79% of those have 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.
“The survey results are extremely encouraging,” says Louise O’Sullivan, Founder, President and CEO of Prime Advantage. “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."
Each year, using an online survey platform, Prime Advantage surveys a cross section of purchasing executives and professionals from its member companies. The latest survey data was collected in July 2015 from representatives of Prime Advantage member companies in durable goods manufacturing, with annual revenues ranging between $10 million and $4 billion, of which the majority range between $20 million and $500 million.
Seventy-seven supply chain professionals participated. They represent U.S.-based manufacturers in more than 25 different industries, including commercial food service equipment, packaging, truck and trailer, material handling, food processing, and construction equipment. Prime Advantage has polled its membership for their impressions of current economic conditions since February 2008. To request a copy of the complete report, go to www.primeadvantage.com/surveys/.
Susan Avery is Editor-in-Chief at My Purchasing Center. She writes articles, blogs and white papers and manages and creates other content for the online procurement and supply management publication. She produces and moderates roundtable discussions, podcasts, webcasts and video interviews. Susan has 30 years experience covering procurement and supply management for Purchasing magazine and Purchasing.com.
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