Manufacturers’ Survey (Cont’d from Page 4)
survey. Just more than 70 percent of larger firms felt positive about their company’s outlook. In contrast, 62.0 percent of small manufacturers (i.e., those with fewer than 50 employees) and 65.5 percent of medi- um-sized businesses (i.e., those with 50 to 499 employ- ees) felt positive in their outlook. Challenges Ahead Weaker domestic demand remained the primary business challenge, but the percentage citing that as a concern dropped from 83.1 percent in the second quarter to 66.5 percent in the third quarter (Figure 6). Other top worries among manufacturers included the inability to attract and retain talent (55.1 percent), rising health care and insurance costs (51.1 percent), trade uncertainties (40.0 percent) and weaker global growth and slowing export sales (36.4 percent). Prior to COVID-19,workforce challenges had been the main concern for manufacturing respondents for 10 consec- utive quarters, and the data suggest that it continues to be a struggle despite the dramatically changed labor market. Tracking The Trends Some other trends regarding predicted growth rates over the next year: • Sales: Respondents expect sales to rise 1.9 percent over the next 12 months,a nice turnaround after antici- pating that demand would plummet 4.3 percent in the previous survey.That reading had been the worst since the first quarter of 2009.More than 59 percent of man- ufacturers predict that sales will increase over the next year, with 36.5 percent feeling that orders will rise 5.0 percent or more. Firm size mattered in the data. Large firms anticipate sales rising 2.6 percent,whereas small and medium-sized manufacturers forecast increases of 1.4 percent and 1.8 percent, respectively. • Production: Likewise, respondents expect produc- tion to increase 2.2 percent over the next 12 months, up sharply following an anticipated decline of 3.8 per- cent in the prior release, which registered the lowest reading since the question was added in the second quarter of 2015.Almost 60 percent forecast output to rise over the coming months, with 20.4 percent see- ing declining production. Large manufacturers felt the most optimistic, anticipating 2.8 percent growth in production over the next 12 months. In contrast, small and medium-sized firms expect output to rise 1.7 per- cent and 2.2 percent, respectively. • Full-Time Employment: In the previous survey, re- spondents expected full-time employment to decrease 2.2 percent over the next 12 months, the weakest
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6 September 14, 2020 Flexo Market News
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