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Manufacturing and Distribution SummitOlympia & Lynnwood, WashingtonSeptember 14 & 15, 2010
National & Washington Survey Results
Survey demographics
Fifth annual national survey
Survey in field March 2 – April 5
1,061 individual company respondents - 69 Washington
68% Mfg / 32% Dist – 85%/15% Washington
84% C level executives – 78% Washington
62% $25 million and above - both
Tax policy results issued April 20th
Official release of results June 7th
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Current condition of business
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“Thriving and growing” by industry segment
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Anticipated recovery timeframe
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Credit availability
Overall 19% of respondents report difficulty securing credit
29% of companies <$25M in revenue report the same
Southwest U.S. has tightest credit
Those reporting lack of available financing also report delayed recovery into 2011 or beyond
Companies with $100 – $250 million in revenue have the highest level of worry about future credit availability
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Top Growth Strategies
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Export sales
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Change in export sales
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Projected health care cost increases
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Challenges of new product development
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Survey data indicates those companies introducingnew products have higher gross margins
Industry segments offering green products
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Profitability of green products
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Projected Employment Levels
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Skilled labor recruiting needs (manufacturing)
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Concern about pending legislation
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Concerns about tax increases for pass-through entities
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Current Manufacturing Situation and Outlook
Source: U.S. Department of Commerce
Growth in Real Output: U.S. Manufacturing vs. Overall GDP
0
100
200
300
400
500
1958 1968 1978 1988 1998 2008
Qantity Index of GDP (1947=100)
GDP Manufacturing
Source: National Association of Manufacturers
Source: U.S. Bureau of Labor StatisticsCompiled by The Manufacturing Institute for the 8th Edition of Facts About Modern Manufacturing
Manufacturing Drives Productivity Growth
Source: U.S. Patent and Trademark OfficeCompiled by The Manufacturing Institute for the 8th Edition of Facts About Modern Manufacturing
The United States leads the way in innovation
US is the #3 Manufacturing Exporter
2007, $Billions
Compiled by The Manufacturing Institute for the 8th Edition of Facts About Modern Manufacturing
Source: National Association of Manufacturers
Jobs Supported by Manufacturing Exports
The Employment Situation
Source: Department of Labor
Deeper Recession, Slower Recovery
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Consumer Confidence
Source: Conference Board
0
20
40
60
80
100
120
140
160
180 2001.10 = 100
July 07 (131.2)
August 10 (62.7)
Source: Commerce Department
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1.1
1.2
1.3
1.4
1.5
2006.09 2007.06 2008.03 2008.12 2009.09 2010.06
Mfg Inventory/Sales Ratio
Housing Market
0
20
40
60
80
100
1995.10 1997.08 1999.06 2001.04 2003.02 2004.12 2006.10 2008.08 2010.06
*SAAR (seasonally-adjusted annual rate)Source: U.S. Department of Commerce, OECD
US Trade and the Global Economy
92
94
96
98
100
102
104
106
108
-50
-40
-30
-20
-10
0
10
20
30
40
50
2007.12 2008.04 2008.08 2008.12 2009.04 2009.08 2009.12 2010.04
OECD Leading Indicators
(100=long-term average)
U.S. Trade3 Month Percent Change (SAAR*)
Exports Imports OECD Leading Indicators
Manufacturing Production
Source: Federal Reserve
Source: Federal Reserve, and NAM Forecast
The Manufacturing Outlook
Source: Department of Commerce, and NAM Forecast
The Outlook for GDP
Summary
• Business conditions improved• Some limited credit availability especially for smalls• New export markets driving international sales growth• Capacity increasing • Less inventory reduction planned• Potential for inflation• New product development increases gross margins• Go green but understand the cost• Workforce skills shortages will only increase• Unprecedented concern exist over policy issues
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Experience the power of being understood.SM
Note our new web address: www.mcgladrey.com
Continue the conversation
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http//mfgblog.mcgladrey.com
