Manufacturing Survey: Profitability Improving

By John S. McClenahen Manufacturers are looking forward to a more profitable 2004. Some 76% of senior financial executives in manufacturing companies surveyed last month by Manufacturers Alliance/MAPI expect their companies' profitability to be moderately higher next year. Another 8% anticipate profits being significantly higher in 2004 than in 2003, adds the Arlington, Va.-based business research and public policy group. A total of 54 executives participated in the survey. Cost-cutting measures, and efficiency and productivity gains are given most of the credit among companies with improving earnings. For firms who have not seen better earnings, sluggish or declining domestic sales, continued pricing pressure from imported manufactured goods and higher input costs get most of the blame. There is no clear consensus among the executives on the impact of their companies' foreign operations on the volatility of earnings. Some 48% say earnings volatility has not been affected. Nearly the same percentage, 46%, says foreign operations have increased earnings volatility. And 6% report foreign operations have reduced earnings volatility.

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