Every day we are hearing more and more positive economic news. It’s refreshing after a few years of mostly downs.

We Deliver Distribution News to Your Inbox Sign up below to receive MDM Update, your free weekly distribution news update by email.

In the latest Group CFO Survey from Prime Advantage, a buying consortium for midsized manufacturers, CFOs say they continue to see solid signs of the economic recovery in U.S. manufacturing. It’s just one survey, but it seems to match what we’re seeing from other surveys recently released, and what we’re hearing overall in manufacturing.

Member companies say they are planning more hiring, wage increases and capital expenditures. What’s more, manufacturers’ top priorities in 2012 include cutting operational costs, developing new products and services, and long-term strategic planning (rising 13 points from 2011). Last year’s top priority, the ability to quickly respond to market conditions, fell 24 percent.

I agree with survey authors, who said these results indicate that companies are employing proactive growth strategies rather than reactive strategies that reflected the uncertainty during and post-recession.

Top internal concerns include the ability to maintain margins (71 percent of respondents); attracting skilled workers (40 percent) and forecasting accurate results (38 percent). The cost of healthcare tied for third as a concern.

External concerns were the same as last year: customer demand (67 percent down from 82 percent last year), price pressure from competitors (64 percent) and the cost of non-fuel commodities (40 percent).

Other items of note from the survey:

• Nearly 70 percent of executives in the survey are optimistic about their companies’ financial prospects in 2012, up slightly from 2011’s survey. Sixty-seven percent feel better about 2012 than the prior year.
• Interestingly, even though sentiments about the overall economy are somewhat tempered, nearly all manufacturing CFOs in the survey say they believe manufacturing will stay the same or continue to expand in 2012. (That’s in line with MAPI’s recent forecast that manufacturing will outpace GDP growth into 2013. Listen to MAPI Economist Don Norman’s outlook in the MDM-MAPI Economic Update podcast.)
• Fifty-nine percent of manufacturers in the survey expect moderate to high growth from key customers in 2012 – a positive sign. And even more positive, nearly 95 percent of CFOs are planning to invest in manufacturing equipment and 63 percent in computer hardware this year.
• The majority of CFOs report increases in new order pipelines.

Prime Advantage surveyed financial executives from its member companies that represent US-based manufacturers in more than 25 different industries, including commercial foodservice, packaging, truck and trailer, material handling, food processing and construction. These small and mid-market companies range in annual revenues between $10 million and $4 billion, of which the majority ranges between $20 million and $500 million.