Plus: CEOs Lower Outlook, Manufacturers Identify Top Issues, Jobless Claims Drop and Suppliers to Benefit from Manufacturing Upswing.

CEOs Soften Economic Expectations

Chief executives of United States companies expect slower economic growth ahead, and have lowered their expectations for sales, capital investment and hiring compared with last quarter, according to the results of the Business Roundtable’s latest quarterly CEO Economic Outlook Survey.

Based on responses from 164 member CEOs in May and June, real gross domestic product (GDP) is estimated to grow 2.1 percent in 2012, down slightly from last quarter’s estimate of 2.3 percent.

Some 75 percent of respondents to the second-quarter survey anticipate their companies’ sales will increase over the next six months, down from 81 percent in the first-quarter survey. The percentage of CEOs expecting their firms to increase capital spending (43 percent) dropped by 5 percent from the Q1 survey. Meanwhile, the number of CEOs expecting to boost hiring (36 percent) dropped by 6 percent.

Based on the survey results, the Business Roundtable’s composite index of CEO expectations for the next six months dropped from 96.9 in Q1 to 89.1 in Q2. A reading above 50 indicates expansion.

“While CEOs see continued economic expansion, the dip in quarterly sentiment reflects concern over increasingly persistent obstacles to a stronger recovery, including uncertainty over year-end U.S. government tax and spending plans and a path to resolution of the Eurozone crises,” Jim McNerney, chairman of Business Roundtable and head of the Boeing Company, said in an announcement of the findings.

The Federal Reserve last week delivered a fresh wave of economic stimulus as it forecast that subpar U.S. growth would be even worse this year than previously estimated.

Critical Issues for Manufacturing Laid Out

Manufacturing Executive, a sister publication of Industry Market Trends, last week announced its 2012-2013 Critical Issues Agenda, a framework for manufacturing industry debate that is reviewed each year. The result of an extensive consultation process with more than 100 senior executive members of the Manufacturing Leadership Council and the Manufacturing Leadership Board of Governors, the agenda covers both current topical concerns and longer-term trends.

This year’s Critical Issues are: the adaptive organization; factories of the future; industrial policy; global value networks; the innovative enterprise; next-generation leadership and the changing workforce; sustainability; and transformative technologies.

“The agenda reflects a set of business and leadership issues that is on the front burner for manufacturers of all sizes and in all industry sectors,” David R. Brousell, vice president and editorial director at Manufacturing Executive, said. “It will bind the community in common purpose in finding answers to today’s most pressing issues and uncovering tomorrow’s most promising opportunities.”

Jobless Claims Edge Downward

New initial jobless claims fell slightly in the latest week reported, largely due to revisions made to earlier data, which signaled little to no improvement in the labor market. According to the U.S. Department of Labor, seasonally adjusted unemployment claims for the week ending June 16 fell by 2,000 to a total of 387,000, down from the previous week’s upwardly revised total of 389,000. The four-week moving average, which smooths out short-term volatility, increased by 3,500 to 386,250, reaching a six-month high.

The decrease in claims came in below expectations, as economists polled by Reuters had forecast unemployment claims to fall to 380,000 for the week. Claims have risen by 15,000 between the May and June national unemployment survey periods.

Falling claims during the first three months of the 2012 were seen as a promising sign of improvement in job market conditions. But since March, jobless claims have been on an upward trajectory and remained in the range of 380,000 for the past four consecutive weeks.

“Business leaders say companies have scaled back hiring plans because of growing uncertainty over tax and spending policies in the U.S. and concerns about a spillover effect from the financial crisis in Europe,” MarketWatch notes. “Their most pressing concerns are sharp tax hikes and federal spending cuts that are slated to take effect Jan. 1, 2013 unless Congress changes current law.”

RFID Market to Rise in 2012

The total value of the entire radio frequency identification (RFID) market will reach $7.46 billion in 2012, up from $6.37 billion in 2011, according to a new report from IDTechEx. Based on extensive research over 12 years, IDTechEx forecasts 3.98 billion RFID tags will be sold in 2012, up from 2.93 billion in 2011, due largely to growth in passive UHF RFID labels.

“In retail, RFID is seeing rapid growth for apparel tagging – that application alone demands 1 billion RFID labels in 2012,” the research and consulting firm says. “RFID in the form of tickets used for transit will demand 500 million tags in 2012.”

The total value forecast for this year includes tags, readers and software/services for RFID cards, labels, fobs and all other form factors. It also includes passive and active RFID.

U.S. Suppliers to Gain Most from Manufacturing Upswing

U.S.-based small and midsized industrial suppliers and distributors are expected to be some of the biggest potential beneficiaries of a resurgence in U.S. manufacturing, according to a recent report from equity firm The Boston Company Asset Management.

The U.S. manufacturing industry continues to grow more competitive in the global market due to a series of incremental changes over the past 10 years, including a weakening dollar; shrinking wage differentials between U.S. labor and other key manufacturing nations; decreasing natural gas prices; and rising costs and slower speeds within the global supply chain.

These factors, particularly lower labor costs driven by increased automation, which has lowered U.S. manufacturing wages relative to other economies, are forecast to drive a strong revival in the manufacturing sector. The report found that large multinational companies are more likely to allocate production to the U.S., and the smaller U.S.-based suppliers to these larger manufacturing firms will see the highest growth as a result.

“We see the list of winners encompassing components suppliers, transportation companies and raw material producers,” Bart A. Grenier, CEO and chief investment officer of The Boston Company, said in an announcement of the findings.  “The most attractive beneficiaries may not be the most obvious.  In addition to the direct beneficiaries, we see benefits accruing to retailers, banks and others that serve regions where manufacturing activity increases.”