Most U.S. manufacturers see clear skies ahead, according to a new survey released by the National Association of Manufacturers.
A majority, 87.6% of 450 respondents, of small, medium and large businesses reported feeling at least somewhat positive about their company’s outlook in the first quarter of 2021, compared to the dismal 33.9% optimism low in the second quarter of 2020. Optimistic responses broke down into 27.3% of respondents who said they were “very positive” responses and 60.22% who were only “somewhat positive.”
NAM CEO Jay Timmons noted the rising pace of vaccination and signs of an improving economy as reasons manufacturers may be hopeful for the future.
“Our industry is creating new jobs and investing in new projects, buoyed by signs that we may finally be getting COVID-19 under control,” said Timmons in a release.
For many respondents, the specter of COVID-19 as a pressure on income is largely behind them: 32.9% of respondents, a plurality, said revenue at their company returned to normal before the current quarter. A smaller group representing 20.6% of surveyed manufacturers expect things to be back to normal by the second half of the year instead.
Almost one half of respondents said they would increase production in the first quarter compared to last quarter, while 38% said they were looking to increase employment and 24.9% signaled increases in capital spending.
The survey also cast a light on the challenges facing manufacturers now. More than three-quarters of respondents listed increased raw material costs as a significant challenge for their business, and 65.8% chose “attracting and retaining a quality workforce” as a difficulty.
Slightly over half said rising health care costs and transportation and logistics costs were an issue, while just under half—48.7%--complained that supply chain challenges were causing issues with inventory management.
Most of the surveys went to medium-sized manufacturers, which represented 53.3% of responses. Small and large companies each represented 22.7% and 24.0%, respectively. Of these subgroups, large manufacturers were the most optimistic, with 90.7% reporting optimism. Nine out of each 10 medium-sized businesses predicted positive conditions for their business, but small manufacturers were more pessimistic than the other two categories with comparatively fewer—78.4%—anticipating better times in their near-term future.