Benchmarked study projects business outlook for U.S. manufacturers

Chicago-based Prime Advantage, a group purchasing organization for midmarket manufacturers, has announced the findings from the 16th annual "Purchasing and Manufacturing (PM) Survey." This benchmarked study reveals financial projections and top procurement insights of more than 750 U.S. manufacturing companies. The results show sustained optimism about revenues and employment growth, as well as heightened awareness of cybersecurity risks.

According to the study, 88 percent of manufacturers project revenues will increase or stay at the same level in the next 12 months. While 40 percent of manufacturers find the challenges of filling open positions a key barrier to growth, 91 percent expect head count to grow or remain steady through the end of the year.

Theft of intellectual property is one of the top threats identified for 2018, with 34 percent of manufacturers saying they experienced a cybersecurity breach within the past year. The top cybersecurity threats in 2017 for small and midsized industrial manufacturers were identified as phishing attacks, IP theft, and third-party security breaches.

Eighty-eight percent of member companies expect revenue to either rise (20 percent) or remain consistent (68 percent) in the next year. Twelve percent predict a decrease in revenue for the coming year. These numbers represent an overall uptick in confidence from 2016’s survey, when only 15 percent were expecting an increase in revenues for 2017 and 69 percent expected revenues to remain steady, with 16 percent predicting a revenue decline.

Eighty-three percent of companies indicate they will increase capital spending (27 percent) or stay the same (56 percent) as last year, a slight increase from 2016.

For the fourth year in a row, a lack of qualified workers is the biggest potential external barrier to business growth, according to 40 percent of respondents. And 29 percent said a lack of demand was also hampering business prospects.

Procurement teams continue to identify raw materials as the top cost pressure at 94 percent, with logistics and transportation as the second biggest cost pressure at 62 percent, followed by component parts at 61 percent. Raw material costs have been identified as the top cost pressure in every Prime Advantage PM Survey since its inception.