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Prime Advantage, a Chicago-based buying consortium for midsized manufacturers, announced the findings of its 11th semi-annual Group Outlook (GO) Survey, revealing financial projections and top concerns of its member companies for 2013. Prime Advantage provides aggregate purchasing power for individual manufacturing companies through its Endorsed Supplier network for its many manufacturing members nationwide.

Clare Goldsberry

March 20, 2013

4 Min Read
Strong revenues projected for small and midsize manufacturers

In January 2013, Prime Advantage surveyed executives and purchasing professionals representing durable goods manufacturing firms, with annual revenues ranging between $10 million and $4 billion, of which the majority ranges between $20 million and $500 million. The survey received a 16% response rate from 490 top professionals representing U.S.-based manufacturers in more than 25 different industries.
Most small and midsized manufacturers expect to beat strong revenues of 2012, with 68% of respondents anticipating an increase in sales in 2013. New product launches are the main reason for expected revenue increases, according to 61%, followed by an expected increase in overall customer demand, cited by 57%.
The GO Survey also saw a big jump in revenue projection, with 72% of the respondents projecting strong revenues in 2013. The GO Survey conducted last August was less optimistic with 48% of respondents predicting revenue growth over the last half of 2012.
Capital expenditure planning remains healthy, as in the previous two years, with 39% of respondents planning an increase from 2012 levels. The most recent GO Survey saw 88% projecting spending increases over the previous year.
GO Survey respondents also reveal that manufacturers’ hiring plans remain in “expansion mode,” with 43% planning to hire more workers this year. While that is down slightly compared to 2012, when 56% of respondents planned hiring, it remains significantly above expectations in 2012, when only 24% of companies were hiring.
“We are encouraged to see that our members expect to see growth in 2013, after a very strong 2012 for most,” said Louise O’Sullivan, founder, president and CEO of Prime Advantage. “As they focus on profitability and margins, we look forward to partnering with both Members and Endorsed Suppliers to fuel the bottom line, reflecting Total Cost of Ownership, along with the top line, greater sales and market share.”

Moldmakers also reporting good business
In the latest survey from the American Mold Builders Association, respondents from 80 member companies appear to be optimistic, reporting a “more positive outlook on future growth than expected.”
While some mold shops are struggling, approximately 8 out of 10 respondents surveyed indicate that current business conditions are either excellent or good, (with the overwhelming majority reporting good) and 17% reporting business being at least fair.
Profits are holding steady, which also contributes to the positive outlook of the moldmakers responding to the survey, with 70% indicating that profits remained the same, up from 60% in the fall 2012 survey.  Those indicating profits are down have also improved from the last survey period, moving from 20% to 16% of the participants report profit declines. With this being said, there does exist a cautionary flag about profitability that must be noted, the AMBA report said. “Beginning at the start of 2012, a decreasing trend line shows the number of moldmaking executives identifying profits as being ‘up’ has been on a consistent decline for the last four quarters – nearly half of the positive responses received just over a year ago,” noted the release.
The better news is that 93% of these respondents are forecasting that they expect business to “increase substantially, moderately or remain the same.
With respect to employment levels, 95% of survey respondents reported they have maintained or increased their workforce levels while the work-week hours have remained consistent over the last 18 months, running at a median of 50 hours.
“We have seen demand continue for AMBA member companies through the final quarter of 2012, and have every expectation this will continue well into 2013,” commented Laurie Harbour of Harbour Results, a manufacturing consulting firm that works with both the AMBA and MAPP trade organizations.

Concerns linger in spite of positive outlooks
In spite of the positive outlooks by both Prime Advantage and the AMBA, there are a number of concerns still plaguing manufacturers. Prime Advantage reports that the top concern of 2013 is the cost of raw materials. “More than 90% of respondents included raw materials in their top three cost pressure concerns and 42% cited this concern in the leading position. [It might be noted here that the number of press releases coming in to PlasticsToday editorial staff from resin producers announcing price increases has jumped significantly over the past three months, indicating that processors will be fighting that battle with their customers once more.]

Healthcare costs, long a major concern for many manufacturers, have moved into second place among cost pressures, according to Prime Advantage’s GO Survey, with 57% of respondents including it in the top-three cost pressures. Healthcare costs ranked as the third-greatest cost concern in the 2012 GO Survey for 49% of the respondents. And in 2011, healthcare costs were cited as the fourth-greatest concern among small and midsized manufacturers, said Prime Advantage’s report.

About the Author(s)

Clare Goldsberry

Until she retired in September 2021, Clare Goldsberry reported on the plastics industry for more than 30 years. In addition to the 10,000+ articles she has written, by her own estimation, she is the author of several books, including The Business of Injection Molding: How to succeed as a custom molder and Purchasing Injection Molds: A buyers guide. Goldsberry is a member of the Plastics Pioneers Association. She reflected on her long career in "Time to Say Good-Bye."

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