OUR THOUGHTS ON:

Opportunity and Optimism - Two Growing Trends in Manufacturing Sector

Manufacturing

By Brian Matthews

The past couple months have shown that there is opportunity and optimism in the manufacturing sector.  According to the Institute of Supply Management, domestic manufacturing activity increased for the twelfth consecutive month in May 2014, which was production and new-order-driven – a good sign of both past and future activity, and that the rebound from winter-related softness earlier in the year has continued. 

Additionally, in a survey of CFOs from midsize U.S. manufacturers, 65% were more optimistic about 2014 than the prior year related to financial projections, according to the Prime Advantage 2014 Group CFO survey.  Concerns over high raw material prices and tightness in far-reaching supply chains have encouraged U.S. manufacturers to protect and improve margins.  Bringing back jobs to the U.S. has also gained attention of U.S. manufacturers, which hit a high in 2013, due to rising wages in developing nations and complications in supply chains. 

With the latest GDP figures showing an expected 4% expansion in 2014, manufacturers seem to have a reason to be optimistic considering that consumer spending growth, which accounts for more than two-thirds of U.S. economic activity, accelerated at a 2.5% pace, as Americans bought long-lasting manufactured goods and spent a bit more on services. 

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