Manufacturing CFOs Expect to Raise Prices During Next 6 Months

Nov. 3, 2008
Grant Thornton study shows rising raw material costs pegged to price increases

The majority of manufacturing executives (55%) are willing to increase prices to offsite rising prices, according a study by Grant Thornton LLP. And this increase might be the reason that 44% of manufacturing CFOs expect their companys financial prospects to improve over the next six months. More than four-fifths of senior financial executives (84%) project that raw material cost hikes will put the most pressure on financial performance followed by energy costs, which 46% of CFOs project will impact performance.

Another aspect of financial concern is credit and only 15% of CFOs indicated that they had to return to bank credit because they could no longer access alternative financial structures. However 58% say that credit is more difficult to obtain that it was just last year. Correspondingly, just over half of respondents (53%) have seen credit costs increase.

Looking at other costs, 86% of the companies reported that they do not provide health care benefits to retirees, a slip from last year's survey which found that 80% of companies do not provide health care benefits to retirees.

The survey also found that CFOs think that in general CEOs are overpaid. More than two-thirds of CFOs (68%) believe that CEOs are overpaid when factoring in pay and benefits packages. When it comes to their own CEOs, however, only 23% think their CEO is overpaid, with the majority, 62%, indicting that their CEO is "appropriately paid."

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