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CFO survey reveals confidence among U.S. midsized industrial manufacturers for 2016

Prime Advantage, a group purchasing organization for midsized manufacturers, has announced the findings of its eighth edition of the CFO Survey, revealing the financial projections and top concerns of industrial manufacturing companies. The results show that optimism in manufacturing among the group's members is far outpacing enthusiasm for the U.S. economy as a whole.

CFOs remain confident in their organizations, with an average optimism ranking of 6.9 out of 10, an increase over the previous year. In contrast, optimism in the U.S. economy has fallen to an average ranking of 5.4.

Eighty-one percent of member companies are relishing in the positive effects of decreased oil prices. The good news is mainly taking the form of increased margins because of lower component costs and freight expenses.

Medical insurance expenses have taken the top spot of internal concerns for manufacturers, with 68 percent of respondents listing health care 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 had 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 eight 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 five points from 2015. The focus on cost-cutting has been in steady decline since 2013, when it peaked at 68 percent.

The January 2016 survey was sent to financial executives and leaders from member companies with annual revenues from $10 million to $4 billion, with most between $20 million and $500 million. More than 25 industries were represented, including commercial food service equipment, packaging, truck and trailer, material handling, food processing, and construction equipment.

To request a copy of the full survey report, visit www.primeadvantage.com/surveys/.