What is in this article?:
- NAM/IndustryWeek Q4 Survey: Sharp Decline in Manufacturers' Optimism
- Manufacturing Wages
Manufacturing wages are expected to rise by 1.1% over the next 12 months, a decline from the 1.5% stated in the last survey. Almost 53% of respondents planned to provide raises of up to 3%, with another 35% saying that wages and salaries for their companies will stay about the same. This does not include the additional costs of benefits, which have been significant, particularly for health insurance. Seventy-nine percent of manufacturers cited rising health insurance costs as a primary challenge, making it the second-most important concern after the fiscal cliff.
Inventories are expected to decline by 1.5% over the next year, with 46% of respondents saying that their inventory levels would stay the same. Meanwhile, the prices for final goods are anticipated to increase by 1.5% on average, slightly above the 1.4% gain suggested last time.
More than 44% of manufacturers plan to keep their prices about the same, with around 36% suggesting final price increases of up to 5%. Almost 8% expect to lower prices. In terms of overall pricing pressures, 39.6% of manufacturers worry about rising energy and raw material costs for their products.
More than 40% of manufacturers cited increasing international sales as one of their primary drivers of growth. Illustrating the importance of overseas markets, firms that were anticipating higher exports over the next year tended to be more optimistic about their overall business outlook. In fact, two-thirds of these export-increasing firms were positive about their outlook versus just 45.2% of those who anticipated slowing or no change in their export sales.
The slowdown of the global economy is a major challenge for the manufacturing sector, which depends heavily on exports for growth. Recent weaknesses have slowed the growth rate of exports, as we have seen in official government data. Here, too, we can see an impact. Export sales are expected to grow 0.7% in the next 12 months, down from an anticipated 1% growth in September and 1.3% gain in March. Even with an easing in the pace of export growth, more than 30% of manufacturers expect them to increase over the next year. Roughly 59%anticipate no changes in their export levels.