Click here to download a pdf of the results.
Concern over the state of the U.S. economy has grown among MDM readers over the past six months even as more believe conditions may soon stabilize, according to the twice yearly MDM Survey on the Economy conducted in August. A similar survey was conducted in February.
Manufacturers who responded to the survey expressed the most concern over the current state of the economy, with 85.1% saying they were “very concerned”or “concerned.”Distributors showed slightly less concern, with 80.3% being “very concerned”or “concerned”in the August survey. Readers who believe the economy will worsen dropped to 28.6% from 46.5% in February. More than 13% believe it will improve over the next six months, almost double from the prior survey.
Though automotive and residential construction continued to be the most cited segments where respondents are seeing slowdowns, more expressed that all sectors are being impacted, especially those tied to consumer spending. In February, a number of respondents believed that any talk of a possible recession would be self-fulfilling. If the responses to August’s survey are any indication, that attitude has shifted.
Few respondents declared that the economic slowdown was a result of media hype, though there was little agreement on the source of concern. Some common responses included: increased energy prices, raw material inflation, a weak dollar, the residential housing slump, and weakness in the financial sector, including banks and the stock market.
Nearly half of respondents believed they would have greater power to increase prices over the next six months. In February, just 35% felt they could justify passing on price increases, citing customer aversion. Nearly 45% of respondents expect no change in the size of workforce at their companies, even though about a quarter of respondents say they are currently considering layoffs as a cost-cutting measure.
More distributors, 31%, expect to make an acquisition in the next six months than did in February, when just 20% said they had acquisition plans.
Nearly a quarter of respondents are either planning to outsource some in-house functions in the next six months or are beginning to look into the option. Information technology is the most likely candidate for outsourcing.
Click here to download a pdf of the results.
