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Customer Demand Main Obstacle in 2009 for Manufacturers

April 29, 2009
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CHICAGO-Prime Advantage, buying consortium for midsized industrial manufacturers, has announced the findings of its first Group CFO Survey, conducted in January 2009, revealing the top financial concerns of its member companies’ chief financial officers for 2009.

Among the top findings from this study was that the credit crunch was not yet having an adverse direct impact on these midsized U.S. manufacturers. Instead, other factors related to the economy are creating more pressing issues.

Ninety-three percent of the respondents listed “an inability to measure customer demand” among their top three external concerns, with 76% of respondents citing this as the top concern. Credit markets and interest rates was the second most frequently listed concern, and volatility of the dollar and a new administration and Congress tied for the third most frequently listed concern.

Sixty-nine percent of the respondents reported that their companies have not been directly affected by the cost or availability of credit, while 24% have been affected “somewhat” and only 7% said they have been affected “very much.”

“Less than 10% of our member company CFOs indicated that they have been directly affected by the credit crunch, demonstrating that there are more pressing issues for midsized manufacturers,” says Louise O’Sullivan, president, founder and chief executive officer of Prime Advantage. “We believe this is reflective of the overall small and mid-tier manufacturing market, and in particular of the good financial health of Prime Advantage members. However, our CFOs indicated that their most pressing concern is slowing customer demand, which could be due in part to tighter credit. An effective federal stimulus that boosts customer demand could mitigate some of their top concerns.”

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