Manufacturers expect sales to grow in 2008

Source: Manufacturing Exec

Date :10/12/2007 08:30:43

The 10th annual survey of manufacturing company CFOs commissioned by Bank of America Business Capital shows that three out of four CFO’s expect expansion in the manufacturing industry.

The survey, which polled 601 top financial decision-makers, showed that three in ten CFOs forecast expansion in the manufacturing sector, an increase of 26 percent since last year but the second lowest percentage in the survey’s history.

The housing market and oil prices are top concerns, the survey found, followed by interest rates, the trade deficit, war in Iraq, and inflation.

Economy expansion, contraction

According to the survey, conducted from August through to October, showed 44 percent expect the U.S. economy to grow next year, while 20 percent expect a contraction.

This compared with 55 percent who expected expansion and 16 percent who expected contraction a year ago when asked about 2007.

Meanwhile, thirty percent of CFOs expect the manufacturing sector to contract in 2008, while 39 percent predict no change with companies in the West most optimistic about expansion in the sector.

The South showed the largest percentage of companies predicting that the manufacturing sector will contract.

Company pricing, revenue

Most CFOs expect higher product pricing in 2008, and most of those with international operations plan to expand those operations, according to survey. A majority say U.S. Federal Reserve interest rate cuts have helped the economy and most expect more cuts in the coming year.

About 70 percent of the CFOs polled expect their company's revenues to rise next year, up from 68 percent who said so a year ago, the survey said, whilst 45 percent expect to grow profit margins during the year.