Seven out of 10 companies surveyed expect future growth
August 2011 - From upgrading facilities to buying technology and adopting Internet strategies, industrial companies are investing confidently in their businesses to build on a period of sustained growth, according to the results of ThomasNet.com's annual Industry Market Barometer (IMB) survey.
'This is a positive outlook for the manufacturing industry," says Linda Rigano, executive director of strategic services at Thomas Industrial Network. "Companies are putting their money where their mouth is ... they are putting investments back in to their companies, and they have shared with us the strategies they're undertaking to succeed."
Nearly half of the 3,400 respondents—business owners and managers, sales and marketing executives, engineers, and purchasing agents from small to midsize manufacturers, distributors and service companies in North America—reported growth in the last six months of 2010, and 88 percent of those are confident in their future expansion.
Two groups came out of the study: outperformers and optimists. Outperformers are companies that have grown and continued to expect to grow. Optimists are those that said their businesses stayed flat but, despite the lack of growth, are confident their businesses will improve. Nancy Simmons, an outperformer and president of Aero Industries Inc., Orlando, Fla., comments on her successes.
About seven years ago, when Simmons was getting ready to purchase Aero Industries, the company's previous owner was threatened by the Internet. "He thought it was going to be the death of us because the company was run by word-of-mouth," says Simmons. But that couldn't have been more wrong.
"The Internet was the greatest contributing factor in my business' growth and success," she says.
According to the survey, 76 percent of companies said their websites had made a contribution to their growth, but it was nine out 10 of the outperformers that said their websites not only have helped increase revenues and open new sources of business but also compete more aggressively.
Partnering with Thomas Industrial Network, she built a website filled with technical information that included a strong presence on ThomasNet.com. "I started to go from a very lackluster performer on my website to thousands and thousands of people reaching me. People from all over the world were coming to me," she says.
Simmons also looked at a different approach to customer service. "I started teaching how to export, how to look at new revenue streams, how to become partners, how to win jobs by teaming with other partners instead of having each of us stand alone," she says.
Though stock market and credit scares gave the United States signs of future uncertainty in recent weeks, the IMB survey has shown otherwise for the industrial sector. Simmons agrees. "If we can make it through 2008-2009," she says, "we can make it through anything."
- Forty-five percent of respondents said their companies grew in the second half of 2010. Thirty-three percent said their businesses remained steady. Of those who grew, 88 percent are confident in future growth.
- Thirty-seven percent of respondents plan to hire through the first half of 2011. The most common job openings align with their priorities and include skilled trade workers (43 percent), line workers (36 percent), and engineering professionals (35 percent), in addition to customer service, and sales and marketing staff.
- Top priorities include increasing production capacity, adding new lines of products and services, upgrading facilities, and managing costs. Most are spending on technology, such as software, for areas such as cost management. To ratchet up production capacity or develop more products and services, they are investing in capital equipment.
- Their top challenge (cited by 68 percent of respondents) is customers cutting back or going out of business, and they are addressing it by focusing on customer retention and service. Domestic competition is another challenge that respondents are tackling by competing in core markets more aggressively and pursuing business in new industries and U.S. geographies.
To view and download the full results of the latest IMB, click here. MM