Original Press Release
NAM/Industry Week Survey of Manufacturers
Press release date: May 5, 2008
Nearly two thirds of respondents say current conditions are 'better than 2000-2001' Export-oriented companies are more optimistic
WASHINGTON, D.C., May 5, 2008 - Results from the NAM/Industry Week Manufacturing Index show that confidence among large manufacturers eroded in the first quarter of 2008 to the lowest level in five years, with sales expectations falling to their lowest level since the second quarter of 2001.
For small manufacturers, the business outlook moderated as well in the first quarter of the year, but remained elevated compared to large survey respondents. Some 57 percent of large and 70 percent of small manufacturing companies who responded to the quarterly survey conducted by the National Association of Manufacturers (NAM) had a positive business outlook for their firm in the first quarter of 2008.
A total of 202 NAM member companies responded to the survey which has been conducted every quarter since 1997. Large (those employing over 1,000 workers) and small companies recorded their business outlook as well as their 12-month expectation on sales, prices, capital investment, inventories, employment and wages.
For smaller companies, the 10 percent drop in confidence from the 80 percent of survey respondents who had a positive outlook in the fourth quarter of 2007 marked the biggest quarterly drop since the 11 percent decline in first quarter of 2001. Having declined five of the past eight quarters, the level of optimism in the first quarter of 2008 was at the lowest level since the second quarter of 2003.
The percentage of large manufacturers with a positive business outlook tumbled 17 percentage points in the third quarter of last year, dropped another 4 percentage points in the fourth quarter, and eroded another 2 percentage points in the first quarter of 2008 to 57 percent, the lowest level since the first quarter of 2003.
Asked if the U.S. economy would go through a recession in 2008, half (50 percent) of the survey respondents answered 'yes,' 17 percent answered 'no' and 33 percent answered 'maybe.'
Despite the moderating business outlook that had taken place over the past two years, the level of optimism for both large and small survey respondents remained higher in the first quarter of 2008 compared to the first quarter of 2001. This is consistent with survey responses indicating that most companies' business environment is better than it was back in 2000-2001. Asked how their current business environment compares to the 2000-2001 period, nearly two thirds (61 percent) of survey respondents answered that current conditions for their company are 'better than 2000-2001,' 17 percent responded that current conditions are 'similar to 2000-2001' and 22 percent responded that current conditions are 'worse than 2000-2001.'
A key finding of the first quarter survey is that a growing number of export-oriented companies are more optimistic. For firms that expect at least 25 percent of their company's sales growth this year to come from exports, 81 percent reported a positive business outlook. For firms that do not export, just 60 percent reported a positive business outlook in the first quarter survey. More export-oriented companies also had a better outlook with respect to sales, capital investment, and employment.
Full results at http://www.industryweek.com/EconInsight/.
The National Association of Manufacturers is the nation's largest industrial trade association, representing small and large manufacturers in every industrial sector and in all 50 states. Headquartered in Washington, D.C., the NAM has 11 additional offices across the country. Visit the NAM's award-winning web site at www.nam.org for more information about manufacturing and the economy.