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Survey shows U.S. manufacturers are optimistic about revenue growth in 2017
- January 17, 2017
- News Release
- Shop Management
While manufacturers across the U.S. are generally optimistic about revenues for 2017, small manufacturers are far more optimistic than larger manufacturers by more than a 2-to-1 margin. That is one of the findings from the 2017 "National Manufacturing Outlook Survey," conducted by the Leading Edge Alliance (LEA Global), St. Charles, Ill., an association of 220 firms focused on accounting, financial, and business advisory services.
“We found that 44 percent of small manufacturers expect revenue growth of 10 percent or more in 2017, while only 19 percent of large manufacturers do," explained LEA Global President Karen Kehl-Rose.
The report contains the expectations and opinions of more than 250 executives from manufacturing companies in more than 20 states that produce a variety of products including industrial/machining, transportation/automotive, construction, and food and beverage.
“Half of the large manufacturers we surveyed expect 3 to 9 percent revenue growth this year, while a still strong 30 percent of small manufacturers have that same optimism,” Kehl-Rose added.
Survey results also indicate that manufacturers are more optimistic about their local/regional economies than the national or global economies. The top priority for manufacturers in 2017 is cutting operations costs, although high-growth manufacturing respondents are more focused on R&D, with 12 percent of high-growth respondents reinvesting more than 10 percent of annual revenue.
Labor continues to be a challenge for manufacturers, with 67 percent of respondents expecting labor costs to increase and an additional 7 percent expecting labor costs to increase significantly in 2017.
The survey also revealed that more manufacturers will be considering sales and mergers, as well as strategic acquisitions, in 2017.
Kehl-Rose said U.S. manufacturing industry headwinds are significant and include both internal issues—such as high inventory-to-sales ratios, the cost of technology, and labor shortages—and external issues—such as the price of raw materials and strength of the dollar.
“To stiffen up and fight through these headwinds,” Kehl-Rose said, “strategic manufacturers should have ongoing conversations with all their advisers, including their accounting and tax provider, as to how to overcome these challenges and achieve their business goals.”
To access the report, visit leaglobal.com/assets/page_pdfs/011017%20LEA%20ManufacturingSurvey.pdf.
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