Sales Projections
This more downbeat assessment carries through to other variables as well. Sales are now expected to increase 2.5% on average over the next 12 months (Figure 3). This is down from 4.7% and 4.3% forecasts in the first two quarters of the year, respectively.
On the positive side, about one-third of manufacturers anticipate their company’s sales to grow by 5% or more, which remains a decent number even if it is below the 50% who said the same thing three months ago. Just 16.6% of respondents said that they expected their sales to fall.
Manufacturers continue to invest in their businesses, but at lower rates. Capital spending and employment should increase 1.2% and 0.7%, respectively, over the next year. In both cases, this figure is well below the average growth rates observed in the last survey (down from 2.5% and 1.9%, respectively).
A large swath of businesses said that they were keeping their investment and hiring levels unchanged, with a fair number of companies downgrading their overall expectations. For example, the percentage of manufacturers stating that their capital spending should increase by 5% or more shifted from about one-third last time to almost one-fourth this time. Likewise, 16.7% of companies anticipate lower employment, up from 10.8% in June.
Figure 3: Expected Growth of Manufacturing Sales, Investment and Employment, 2000-2012
Note: Expected growth rates are annual averages.
