U.S. manufacturers' confidence in the domestic economy as they head into 2008 has dropped 14 points compared with last year, as the heat from the credit and housing crisis begins to be felt by a noticeable number of companies, a new, exclusive Managing Automation reader poll shows.
The poll, conducted in mid-October with more than 360 MA readers, reveals that just 39% of survey respondents expect the U.S. economy to improve moderately, compared with 53% who felt this way last year. Those expecting the economy's numbers to be flat in 2008 increased to 35.4%, compared to 29.9% last year, while those expecting the beginning of a decline rose to 13.5%, from 8.8%.
When asked what impact the mortgage/credit crisis may be having on their businesses, a sizable majority, 60.8%, say they haven't felt anything — yet. But more than 34% said they are indeed feeling an impact in varying degrees, with 13% of this group indicating a "moderate" effect on their business as of the fall.
Despite these findings, poll respondents indicated that their confidence levels in the health of their own businesses going into 2008 hadn't suffered as much as attitudes about the economy. There were, however, some noticeable changes compared with last year. This year, 49% of respondents indicated they were more confident about their business prospects going into 2008, down more than five points from last year. Nearly 13% expressed somewhat less confidence going into the new year, compared with 7.4% in last year's poll.
The status of technology budgets, meanwhile, fared somewhat better than feelings about the economy's prospects in 2008. This year, again, a majority of survey respondents, 54.9%, indicated that their company's technology budget would increase, compared with 57% who said so last year. And those expecting their budgets to be pretty much at the same level year over year came in just about two points higher than last year — 30.4% of the survey group.
At the top of the purchase intention list again this year are such technologies as wireless, manufacturing and business intelligence software, e-commerce technologies, RFID, and product lifecycle management and ERP applications.
A full report on the MA survey's findings and an accompanying analysis will be published in the January issue of Managing Automation magazine.
Two other studies conducted in the industrial market in the final months of this year also show that economic growth and confidence levels among manufacturers are in troubled waters as 2008 looms.
An economic forecast by the Manufacturers Alliance/MAPI, a nonprofit economic and policy research organization whose membership includes U.S.-based and international companies in manufacturing and related business services, predicted in November that inflation-adjusted GDP growth in the U.S. will slow to 2.1% in 2007 and to 1.3% in 2008.
Another study, by PricewaterhouseCoopers, showed a 17-point drop in confidence levels among senior manufacturing executives.
PWC said that its Manufacturing Barometer for the third quarter, based on the opinions of 60 senior executives of large U.S. industrial manufacturing companies, showed that 45% of those surveyed were optimistic, a 17-point drop from the 62% expressing optimism in the prior quarter.