Prime Advantage, a buying consortium for midsized industrial manufacturers, in its third annual Group CFO Survey, found that CFOs are seeing solid signs of the economic recovery in U.S. manufacturing and are planning more hiring and capital expenditures this year. Hiring plans may be limited, however, by a shortage of skilled machine operators and welders and an increase in health insurance costs.

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Seventy-two percent of CFOs in the survey feel more optimistic about the manufacturing economy (up from 64 percent in 2010). The survey was focused on member companies of Prime Advantage. The Bank of America's CFO Outlook 2011 survey saw just 45 percent of manufacturing CFOs expecting sector expansion.

Sixty-seven percent are more optimistic about their companies' financial prospects in 2011 (up from 64 percent in 2010).

Nearly 92 percent of respondents indicated that their companies would be making capital expenditures in 2011, with 74 percent saying they would leverage available temporary tax credits to make improvements in manufacturing equipment and 27 percent planning to accelerate purchases of computer hardware and software in 2011. About 88 percent indicated they will buy manufacturing equipment.

Eighty-six percent said their customers are at least somewhat affected by the cost or availability of credit, though forty-five percent said borrowing conditions have improved since 2010.

Health insurance premiums increased for all respondents in 2010, with 48 percent experiencing an increase in costs of 11 percent or more.

Sixty-seven percent said ensuring a quick response to changing economic environments was their top priority (a jump from 52 percent in 2010).

Sixty-four percent believe that developing new products and services in response to changing consumption patterns is a top priority (compared to 55 percent in 2010). Cutting operational costs, a top priority in 2010, fell to third place, with 56 percent in agreement.

The Prime Advantage Group CFO Survey was conducted in January and February using an online survey platform. Prime Advantage surveyed a cross section of finance executives from its member companies consisting of industrial manufacturing firms from various sectors with annual revenues ranging between $10 million and $10 billion, of which the majority ranges between $20 million and $500 million.

Financial executives surveyed represented U.S.-based manufacturers in more than 25 industries, including commercial foodservice, packaging, truck/trailer, material handling, food processing and construction.