NMW 2003: A majority of companies expect 2003 revenue growth
Chicago, IL — About 68% of companies expect revenue growth in 2003, compared to 2002, according to a survey done by National Manufacturing Week organizers Reed Exhibitions (Norwalk, CT). Results were analyzed by AMR Research (Boston, MA).
Chicago, IL - About 68% of companies expect revenue growth in 2003, compared to 2002, according to a survey done by National Manufacturing Week organizers Reed Exhibitions (Norwalk, CT). Results were analyzed by AMR Research (Boston, MA ).
''This is more optimism than we've seen in doing these surveys in the past year and a half,'' according to Bill Swanton, vp and research fellow, AMR Research. Among small manufacturers (under 500 employees), 27% think the economic turnaround has already begun. That's significant, he said, because smaller companies tend to lead an economic recovery. Overall, capital-spending expectations for 2003 increase slightly over 2002, responses showed. There was considerable variability in results, but a noticeable optimistic tendency. Mr. Swanton made the comments in a March 3, 2003, press conference at the opening of National Manufacturing Week here.
Other trends, Mr. Swanton said, that results showed:
Globalization is an opportunity, rather than a threat;
Potential war with Iraq will hurt companies economically more than it will help.
No massive shift in outsourcing trends. About 17 of plant maintenance and operations is outsourced; 14% of large companies expect to outsource significantly more, versus 7% of small companies.
That the favored approach for industrial automation and manufacturing IT is largely still ''do it yourself,'' with more than 55% choosing to design and integrate purchased components in-house. Third party and automation vendors need to do a better job convincing companies there's value in outsourcing, he said.
For IT-related spending, one-third expect an increase, and half expect no change in 2003, compared to 2002.
More than 65% use strategic sourcing techniques to reduce costs or improve quality of purchased material. More than 40% are reducing the number of suppliers. More than 35% are interacting with suppliers over the Internet.
That when building or acquiring new plants, small companies stick close to home; large companies have major efforts in China. About 55% of small companies are building or acquiring in the U.S. or Canada, compared to 40% for large companies. In China, under 30% of small companies are building or acquiring, compared to nearly 50% for large companies. Mexico was the next highest region, with about 24% and 33% for small and large companies, respectfully.
Data were collected in a survey posted at www.manufacturingweek.com for about six weeks ending Feb. 27. Demographics roughly equal those attending National Manufacturing Week, Mr. Swanton said. Of 750 responding to the survey, 73% worked for companies under 500 employees, 13% for companies employing 500-2499, and 14% for companies larger than 2,500 employees.
Industries split as follows:
41% General manufacturing;
14% Chemicals; 10% High tech;
5% Wholesale distributor; and
''I think people will be cautious, but more positive about revenue growth than with capital spending, until they get their margins back. That's expected,'' Mr. Swanton concluded.
Control Engineering Daily News Desk
Mark T. Hoske, Editor-in-chief