Original Press Release
Second Quarter NAM/Industry Week Index Shows Manufacturers Less Optimistic
Press release date: July 22, 2008
Lowest Confidence Level In History of Survey
WASHINGTON, D.C., July 22, 2008 - Confidence among large manufacturers eroded in the second quarter of 2008, according to a survey conducted jointly by the National Association of Manufacturers (NAM) and Industry Week magazine.
"Only 38 percent of large manufacturing companies who responded to the second quarter survey had a positive business outlook for their company," said NAM chief economist David Huether. "This marks the lowest confidence level in the history of the survey going back to the fourth quarter of 1997."
For small respondents, the three percent drop in optimism from the 70 percent of survey respondents in the first quarter of 2008 to 67 percent in the second quarter marked the fourth decline in the past six quarters. The level of optimism in the second quarter was the lowest level since the second quarter of 2003, but significantly elevated compared to the 2000-2001 time frame.
Results of the second quarter survey are based on responses of 314 NAM member companies. Large (those employing more than 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. In addition, companies were asked about the prospects for a recession in 2008 and the impacts of higher import prices on their company.
Asked if the U.S. economy would go through a recession in 2008, slightly more than one-third (37%) answered 'yes.' This is less than the 50 percent of survey respondents who expected a 2008 recession in the first quarter survey. Twenty -five percent answered 'no,' and 38 percent answered 'maybe.'
Survey respondents were also asked how they were being affected by the rising cost of imports. A full 79 percent of survey respondents reported that inflationary pressures from overseas have spilled over into the domestic economy in the form of "increased costs of materials and supplies purchased domestically"; 59 percent reported "increased costs of materials and supplies imported from abroad"; 30 percent reported "more purchases are being sourced domestically"; and 22 percent reported "eased import competition" as well as "increased pricing power."
Full results of survey: 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.
HANK COX (202) 637-3090