Rising Costs Raise Concerns Among North American Manufacturers
The results of the first survey, released in January, revealed that the group’s manufacturing members were apprehensive of rising material (43%) and energy (17.5%) costs. This latest study reveals that 93% agree that material costs will be an economic concern for the rest of 2008, with a 67% agreement on energy costs following closely behind.
Survey data was collected from 72 senior-level representatives of industrial manufacturing companies, including business owners, vice presidents of procurement and purchasing directors.
“The survey has served as a reliable indicator by identifying key economic factors of influence for mid-sized manufacturers throughout North America,” says Louise O’Sullivan, president and founder of Prime Advantage.
Unlike the first survey, inflation is now the third highest concern, with 39% in agreement, up 31 percentage points from January. Logistics and supply chain costs followed closely at 38%, up 21.6 percentage points. Healthcare (18%), foreign competition (12%), overhead (11%) and labor (8%) were among the other cost pressure concerns identified by survey respondents.
In addition, 51% of respondents have shifted the top sourcing priority to identifying reliable and cost-efficient sources for raw materials, rather than improving efficiency measurements.
The survey also showed confidence for employment opportunities in the second half of 2008. While 17% expect job cuts within the next six months, another 17% expect job growth and 66% expect no change in their current employee base.