Executive Briefings

Mid-Sized Industrial U.S. Manufacturers Confident About 2016

Optimism among mid-sized manufacturing companies in the U.S. outpaces their enthusiasm for the economy as a whole, according to the 8th Annual CFO Survey from Prime Advantage.

CFOs remain confident in their organizations with an average optimism ranking of 6.9 out of 10, an increase over the previous year, according to Prime Advantage, a buying group in mid-market manufacturing. In contrast, optimism in the U.S. economy is lagging as it fell to an average ranking of 5.4.

Eighty-one percent of member companies are relishing in the positive impacts of decreased oil prices. The good news is mainly taking the form of increased margins, due to lower component costs and savings on freight expenses.

Medical insurance expenses take over the top spot of internal concerns for manufacturers, with 68 percent of respondents listing healthcare costs in their top three concerns. Attracting and retaining qualified employees comes in as a close second, at 64 percent. Preserving morale and productivity continues to be an initiative of note, with 36 percent of financial professionals listing this concern.

On the bright side, there was a 24-point decrease in respondents worrying about their ability to maintain margins in comparison to last year. This result is possibly attributable to dwindling concern over the price of raw materials and components, which saw an 11-point decrease.

Items topping the priority list for 2016 for financial executives have shifted from 2015, with 68 percent of respondents mentioning the importance of growth in existing markets, which is up 8 points from 2015. Success is likely to come from new products and services, according to 63 percent of those responding. Cutting operational costs rounds out the top three at 54 percent, which is down 5 points from 2015. The focus on cost cutting has been in steady decline since 2013 when it peaked at 68 percent.

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CFOs remain confident in their organizations with an average optimism ranking of 6.9 out of 10, an increase over the previous year, according to Prime Advantage, a buying group in mid-market manufacturing. In contrast, optimism in the U.S. economy is lagging as it fell to an average ranking of 5.4.

Eighty-one percent of member companies are relishing in the positive impacts of decreased oil prices. The good news is mainly taking the form of increased margins, due to lower component costs and savings on freight expenses.

Medical insurance expenses take over the top spot of internal concerns for manufacturers, with 68 percent of respondents listing healthcare costs in their top three concerns. Attracting and retaining qualified employees comes in as a close second, at 64 percent. Preserving morale and productivity continues to be an initiative of note, with 36 percent of financial professionals listing this concern.

On the bright side, there was a 24-point decrease in respondents worrying about their ability to maintain margins in comparison to last year. This result is possibly attributable to dwindling concern over the price of raw materials and components, which saw an 11-point decrease.

Items topping the priority list for 2016 for financial executives have shifted from 2015, with 68 percent of respondents mentioning the importance of growth in existing markets, which is up 8 points from 2015. Success is likely to come from new products and services, according to 63 percent of those responding. Cutting operational costs rounds out the top three at 54 percent, which is down 5 points from 2015. The focus on cost cutting has been in steady decline since 2013 when it peaked at 68 percent.

Read Full Article