NAM expects moderate growth
By Staff -- Modern Materials Handling, 7/1/1999
The nation's small manufacturers expect continued but moderate growth in 1999, with a slight slowdown across-the-board in sales, wages, capital investment, exports, and profitability, according to the National Association of Manufacturers (NAM) annual survey."The likelihood of slower business growth should help dampen the Fed's concern about an overheated economy and quell talk of a hike in interest rates," says NAM president Jerry Jasinowski. "The survey indicates that we are going to stay at a moderate speed, with low inflation and stable employment, for the foreseeable future. Given the slowing economy, there is no reason to raise rates."
According to Jasinowski, the survey illustrates the extent to which the Internet is revolutionizing business. The use of the Internet by small companies for business purposes has jumped dramatically, from 38% in 1996 to 85% in 1999.
"Among CEOs, the percentage using the Internet for business purposes has swelled from 12% in 1996 to nearly 52% in 1999," says Jasinowski. "Clearly small manufacturers are increasingly cyber savvy and ready to try new innovative ways to do business."
Specific survey findings supporting the business and economic slowdown show:
- Nearly 24% of manufacturers expect their sales to increase by over 10% in 1999, a moderate slowdown from 1998, when 29% experienced similar high sales.
- Profits look less volatile in 1999. While fewer companies expect profits to grow or decline, 30% expect profits to remain the same in 1999, compared to 22% whose profitability stayed nearly the same in 1998.
The survey revealed the three most serious problems facing small manufacturers are finding and keeping qualified employees (32%), the rising cost of health insurance for employees (23%), and burdensome government regulations (19%).
NAM has 10,000 member companies with 500 or fewer employees.
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