WASHINGTON, D.C.-The National Association of Manufacturers Small Manufacturers Operating Survey for 2008 shows that most respondents are optimistic about results in 2008, with 56% expecting sales this year to rise at least 5%, and 16.2% expecting increases of more than 10%. Less than 27% expected sales to decline at least 5% from 2007, with 12.4% expecting a decline of more than 10%.

The survey results confirm that the tax cuts for business designed to encourage capital investment are having the desired effect. More than 80% of respondents expect capital investment to increase or at least stay the same, with only 17.2% expecting a decrease. The largest group, or 28.5%, expected capital investment to rise by more than 10%. The average capital investment for 2008 among respondents was $1,585,641. More than half of respondents say the reduction of the tax rate for S-corporations is “important” to their businesses. All of which suggests continued expansion in the manufacturing sector and creation of new jobs.

The survey also confirms that the opportunities created by free trade agreements are sparking expansion by small and medium manufacturers. A growing number of them report increased export sales. The average sales attributed to exports was 12.38%, up from 10.73% the year before. A full 58.5% of respondents expect exports to rise at least 5% this year, and more than half of those expect rises of 11% or more. Only 20.8% report they expect no export sales this year.

Also, 89% of the responding small companies say they expect to increase employment in 2008, and 91% expect it to increase in 2009, but that is contingent on their ability to find job applicants who are qualified to work in modern manufacturing. That is a growing concern for U.S. manufacturers as an aging workforce nears retirement. Almost half of respondents to the survey say they have jobs empty right now because they cannot find qualified applicants.