Confidence of small manufacturing companies rises

The Small Business Research Board (SBRB) Manufacturing Industry Small Business Confidence Index (M-SBCI) rose to 43.66 during the first quarter of 2008, an increase of 15 points (52.3 percent) from the 28.66 recorded the previous period.

All three major indicators were higher and contributed to the increase in the index, according to the report co-sponsored by International Profit Associates.

The poll of owners and managers of manufacturing companies indicated that 41 percent are expecting the economy to improve during the next 12 months, 18 points higher than the 23 percent who believed the economy would improve as reported in the fourth quarter of 2007. 54 percent of the same group said they expect revenues to increase during the coming 12 months versus 37 percent who predicted revenue increases during the previous quarter.

Plans for hiring were also more optimistic with 36 percent of the respondents saying they would increase hiring during the next 12 months compared to the 26 percent who said they would increase hiring during the previous period.

The 43.66 current manufacturing industry confidence index is consistent with the 43.67 reported for all U.S. small businesses during the first quarter of this year.

Meanwhile, the quarterly report said 41 percent of the businesses have raised prices in response to increased fuel costs. For those businesses adjusting to an increase in fuel prices, 22 percent have reduced business travel and 20 percent have eliminated routing, or reduced the length of delivery routes, in addition to reducing other costs. Survey participants reported a higher level of just-in-time ordering as the fifth-mentioned possibility for offsetting costs.