Economic Outlook Study
Research was undertaken to gain a better understanding of Control Engineering subscriber’s opinions regarding the impact of current economic conditions on their respective businesses.
When asked to characterize the impact of current economic conditions on customer orders, 67% of respondents state that business activity has stayed level or increased over the past year. In terms of the impact on capital spending, 61% state capital spending has stayed the same or increased over the past year.
Few respondents (17%) mention their company is taking advantage of the depreciation deduction offered in the 2008 U.S. Economic Stimulus Act.
36% of respondents mentioned that tighter credit conditions have impacted their business operations. When probed, those respondents mentioned that new projects and purchases have been most negatively affected.
Almost half of respondents (46%) felt that the current economic conditions presented opportunities for their businesses. And while there is no general consensus where opportunities exist, 16% mentioned they have increased exports while another 12% are taking advantage of an uptick in energy related business.
When asked what areas of their business have been most negatively impacted, about one-quarter of respondents mentioned that sales/orders are down compared to last year. 15% cited they have witnessed an increase in cost for raw materials and energy. 8% mentioned that no area has been impacted. The remaining 50% (other) of responses are varied too widely to be grouped into specific areas of focus.
Almost one-third of respondents mention that automation projects have been suspended due to current economic conditions. Over half of respondents mention their budget for automation has not changed in the last year. However, 34% of respondents have seen a decrease.
For those respondents experiencing an increase to their automation budget, 35% mentioned this increase was greater than 15%. For those respondents experiencing an decrease to their automation budget, 36% mentioned the decrease was greater than 15%.
39% of respondents spend more than $100k annually on automation equipment. 14% spend more than one million dollars annually.
One-third of respondents mention their organizations have experienced an increase in orders from non-North American operations. Of those, over half mention they attribute this change to the increase in global currency values against the U.S. dollar. Others attribute the increase to higher global demand and buyers seeking recognized quality of North American products.