The National Association of Manufacturers fourth-quarter Manufacturers’ Outlook Survey showed a respondent pool growing increasingly positive about the business outlook for their firms.
Nearly three-quarters (74.2%) of manufacturers who responded characterized the business outlook as “positive,” up from 66% in the previous outlook survey. The 74.2% figure is nearly equivalent to the survey’s historical average of 74.4% and a soaring improvement over the 33.9% reported in the second quarter, NAM data show.
Nevertheless, for the year as a whole, 62.4% of manufacturers expressed a positive outlook, down from 92.4% in 2018 and 76.2% in 2019. It was also the lowest annual average since 2009, NAM shared.
“There’s no question manufacturers have rebounded since the dramatic downturn in the spring, although a return to pre-pandemic optimism is still months away,” said NAM President and CEO Jay Timmons in a press release.
As a whole, large manufacturers were more optimistic, with 81% expressing a positive outlook in the fourth quarter, compared with 68.1% of small manufacturers.
A snapshot of additional fourth-quarter findings shows that:
- The average expected growth rate for sales over the next 12 months is 3.4%, compared with 1.9% in September’s survey. Nearly 20% of respondents said they expect their company’s overall sales to grow by more than 10% over the next year.
- Similarly, respondents reported an average expected increase in production levels of 3.4%. This is up from 2.2% in September. Nearly 19% of manufacturers said they expect production levels to increase by more than 10%.
- Respondents expect raw material prices and other input costs to rise by an average 3.3%. Fewer than 2% expect a drop in these costs.
- Manufacturers reported an average expected increase of 1.8% in full-time employment over the next year. Six percent reported growth expectations in excess of 10%, while 12.2% said they expected a drop in full-time employment.
- The expected growth for health insurance costs came in at 6.4% over the next 12 months, compared with 5.8% in the third-quarter survey.
- Nearly 26% of respondents reported that their revenues had returned to normal (pre-COVID levels) prior to the fourth quarter, with 48.2% looking for a return to normal in the first half of 2021.
NAM conducted its fourth-quarter survey between Nov. 19 and Dec. 3, 2020, with a total of 624 responses.
