Business leaders in the manufacturing space are pessimistic, with only a third (33 percent) expecting the U.S. economy to improve in the next six months, according to Grant Thornton’s quarterly survey of U.S. business leaders. The hiring outlook for manufacturing companies is also gloomy — only 37 percent of manufacturing business leaders report that their companies will increase hiring in the next six months.
Even though manufacturing business leaders’ are not optimistic about the U.S. economy, their view of their own businesses is still good, with 77 percent feeling optimistic about their companies’ growth over the next six months.
“This is very consistent with the discussions I have had with our clients across the country, said Walter Gruenes, National Managing Partner of Consumer and Industrial Products at Grant Thornton LLP. ” Manufactures are very optimistic about the factors that they can control, such as their own productivity, quality of their products, ability to control internal costs. However, they are pessimistic on matters that they feel are beyond their control. There is a great sense of uncertainty regarding national policy regarding taxes, union and labor matters, export and monetary controls to name just a few. As a result, they are very hesitant to increase their staff until some of the uncertainty is resolved in their own minds.”
With regard to the recession, more than three-quarters (77 percent) do not think it will end until 2011 at the earliest. Only one in five manufacturing business leaders (19 percent) say that the recession is already over.
|
All |
Manufacturing |
Believe U.S. economy will improve |
34% |
33% |
Believe U.S. economy will worsen |
16% |
23% |
Very or somewhat optimistic about own business |
76% |
77% |
Very or somewhat pessimistic about own business |
24% |
23% |
Plan to increase staff |
38% |
37% |
Plan to decrease staff |
15% |
19% |
When do you think the economy will come out of recession?
In addition to the regular three Business Optimism Index questions, Grant Thornton asked senior U.S. business executives when they thought the country would come out of the recession.
|
All |
Manufacturing |
Second half of 2010 |
6% |
4% |
First half of 2011 |
28% |
23% |
Second half of 2011 |
34% |
33% |
Later |
16% |
21% |
The recession is over |
16% |
19% |
August 2010
May 2010
February 2010
About the Grant Thornton Business Optimism Index
The Grant Thornton Business Optimism Index is a confidence measure of U.S. business leaders. The Index is a composite score for three questions:
- U.S. economy: Do you feel the U.S. economy will improve/remain the same/get worse in the next six months?
- Business growth: How optimistic are you about the growth of your own business over the next six months – very/somewhat optimistic/pessimistic?
- Employment: Do you expect the number of people you employ will increase/remain the same/decrease in the next six months?
Each response is assigned a value of -1 (get worse, very pessimistic, decrease), 0 (remain the same, somewhat optimistic/pessimistic), or +1 (improve, very optimistic, increase). The Business Optimism Index is the aggregate of these three measures, indexed to a scale from 0 to 100.
The survey was conducted between August 2-13, 2010, with more than 350 senior executives of which 52 were from the manufacturing industry. To see all the survey findings, please visit www.GrantThornton.com/BOI.
Grant Thornton’s COO Lou Grabowsky discussed the August 2010 survey findings with CNBC. Watch Lou discuss the findings or read the CNBC.com article on the survey findings.
___
About Grant Thornton LLP
The people in the independent firms of Grant Thornton International Ltd provide personalized attention and the highest quality service to public and private clients in more than 100 countries. Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd, one of the six global audit, tax and advisory organizations. Grant Thornton International Ltd and its member firms are not a worldwide partnership, as each member firm is a separate and distinct legal entity.
In the U.S., visit Grant Thornton LLP at www.GrantThornton.com.
