Manufacturing CFOs Continue To Be Optimistic For 2010

Manufacturing.Net reports that a recent survey found optimism continuing into 2010 for small and mid-sized manufacturing companies. Sixty-seven percent said they feel more optimistic about the economy compared to 2009, and 64% believe the manufacturing economy will expand in 2010. Sixty-four percent were more optimistic about the financial prospects for their companies than they were in 2009.

When asked to rank their companies’ financial prospects for 2010 on a scale of 1-10, with 10 being most optimistic, 51% ranked themselves at 7 or higher. In 2009, 55% of CFOs were pessimistic about the economy, and 45% said they were pessimistic about their companies’ financial prospects.

For 2010, the recession and tight credit conditions will likely continue to impact growth. Ninety-one percent of respondents said their customers and prospects have been affected by the cost or availability of credit. Fifty-seven percent said domestic employment in their factories won’t return to year end 2007 levels before 2011 or 2012, but 82% still said they would hire new staff to meet increased demand in 2010.

To get past the recession hangover and improve liquidity, 79% of companies are reducing inventory levels, 52% are working to improve purchasing and sourcing efficiency, and 48% are implementing asset and inventory optimization plans.

Seventy percent of respondents said they will continue to focus on cutting operational costs as their top corporate policy. Fifty-five percent said their organizations will focus on developing new products and services, while 52% say a top priority will be to respond quickly to future economic changes and find new markets for products and services.

Uncertainty about customer demand was the top external concern among 61% of respondents, followed by price pressures at 28% and federal government policies at 19%.

Some of the top internal concerns include health care costs at 28%, ability to forecast results at 25%, and maintaining employee morale and productivity at 22%.