Released June 28, 2021 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Capital spending expectations by U.S. manufacturers are the strongest in nearly three years as the economy continues its recovery, with respondents anticipating an average increase of 3.3% over the next 12 months, according to a newly released survey.
The National Association of Manufacturers (NAM) released the results of its second-quarter outlook survey last week. The survey, which was conducted from May 19 through June 2, received 495 responses.
The latest spending expectations are up from 2.7% capital spending growth reported in the first quarter. Almost 55% of the respondents in the latest survey indicated they expect additional spending in the next year, with 37.3% predicting no change and 8.1% forecasting reduced capital expenditures. By firm size, small (those with 49 or less employees), medium-sized (between 50 and 499 employees) and large manufacturers (500 or more employees) saw capital spending increasing 1.8%, 3.3% and 4.5%, respectively.
The survey results reflect Industrial Info's latest North American Industrial Spending Index update, which shows a 36% rise in the project spending pipeline on a year-over-year basis. Spending by the Industrial Manufacturing Industry, which covers a wide swath of sectors ranging from automotive production to data centers, was up 82%. For related information, see June 25, 2021, article -- North American Industrial Project Activity Up 36%.
David Pickering, Industrial Info's vice of president of research for the Industrial Manufacturing Industry, said last year's COVID-19-sparked manufacturing shutdown "forced companies to explore alternative means of production at a faster pace than originally planned. The movement to automated processes and technology, manufacturing 4.0, has been coming for quite a while, but gradually.
"With workers suddenly becoming a liability, for the short term, as everyone learned how to combat the pandemic, manufacturers were forced to speed up their time table and move to more automated manufacturing to combat the lack of workers which allowed production to continue, even at a slower pace, while the world worked its way to a solution for COVID. Spending rebounded rapidly because the slowdown was a forced one and not one dictated by the economy itself."
Industrial Info is tracking more than $420 billion in active capital U.S. Industrial Manufacturing projects, with the West Coast market region (California, Oregon, Washington, Alaska and Hawaii) leading the charge.
Click on the image at right for a graph showing U.S. Industrial Manufacturing Industry capital project activity by market region.
According to the NAM survey, 90.1% of the respondents signaled they were positive about their own company's outlook, the highest level since March 2018. The trade association said manufacturing production is likely to exceed pre-pandemic levels in the third quarter of 2021, with sales rising on the economic recovery.
The positive signs are reflected in the latest national poll on consumer confidence by Investor's Business Daily and TechnoMetrica, which rebounded in June after a drop in May. May's results showed a 3.5% decline, but this was up 3.7% in June. This month's reading matches April's reading for the highest mark since February 2020.
Challenges to manufacturing growth remain, however, according to the NAM survey, which noted significant supply-chain disruptions in the marketplace as firms have sought to keep up with demand. The most recent Institute for Supply Management (ISM) report indicated supplier deliveries were the slowest since April 1974.
Bottlenecks at ports remain a challenge, according to the survey results, with 59.5% of the respondents saying that the delayed delivery of imported parts or components needed for production was their greatest challenge relating to international ocean shipping and their business. For related information, see May 10, 2021, article - Bottlenecks at California Ports Amid Record Activity Hurt U.S. Manufacturers.
"In addition, firms continue to note challenges with finding talent, and yet, manufacturing job openings have soared to new record levels," NAM said in a press release.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
The National Association of Manufacturers (NAM) released the results of its second-quarter outlook survey last week. The survey, which was conducted from May 19 through June 2, received 495 responses.
The latest spending expectations are up from 2.7% capital spending growth reported in the first quarter. Almost 55% of the respondents in the latest survey indicated they expect additional spending in the next year, with 37.3% predicting no change and 8.1% forecasting reduced capital expenditures. By firm size, small (those with 49 or less employees), medium-sized (between 50 and 499 employees) and large manufacturers (500 or more employees) saw capital spending increasing 1.8%, 3.3% and 4.5%, respectively.
The survey results reflect Industrial Info's latest North American Industrial Spending Index update, which shows a 36% rise in the project spending pipeline on a year-over-year basis. Spending by the Industrial Manufacturing Industry, which covers a wide swath of sectors ranging from automotive production to data centers, was up 82%. For related information, see June 25, 2021, article -- North American Industrial Project Activity Up 36%.
David Pickering, Industrial Info's vice of president of research for the Industrial Manufacturing Industry, said last year's COVID-19-sparked manufacturing shutdown "forced companies to explore alternative means of production at a faster pace than originally planned. The movement to automated processes and technology, manufacturing 4.0, has been coming for quite a while, but gradually.
"With workers suddenly becoming a liability, for the short term, as everyone learned how to combat the pandemic, manufacturers were forced to speed up their time table and move to more automated manufacturing to combat the lack of workers which allowed production to continue, even at a slower pace, while the world worked its way to a solution for COVID. Spending rebounded rapidly because the slowdown was a forced one and not one dictated by the economy itself."
Industrial Info is tracking more than $420 billion in active capital U.S. Industrial Manufacturing projects, with the West Coast market region (California, Oregon, Washington, Alaska and Hawaii) leading the charge.
According to the NAM survey, 90.1% of the respondents signaled they were positive about their own company's outlook, the highest level since March 2018. The trade association said manufacturing production is likely to exceed pre-pandemic levels in the third quarter of 2021, with sales rising on the economic recovery.
The positive signs are reflected in the latest national poll on consumer confidence by Investor's Business Daily and TechnoMetrica, which rebounded in June after a drop in May. May's results showed a 3.5% decline, but this was up 3.7% in June. This month's reading matches April's reading for the highest mark since February 2020.
Challenges to manufacturing growth remain, however, according to the NAM survey, which noted significant supply-chain disruptions in the marketplace as firms have sought to keep up with demand. The most recent Institute for Supply Management (ISM) report indicated supplier deliveries were the slowest since April 1974.
Bottlenecks at ports remain a challenge, according to the survey results, with 59.5% of the respondents saying that the delayed delivery of imported parts or components needed for production was their greatest challenge relating to international ocean shipping and their business. For related information, see May 10, 2021, article - Bottlenecks at California Ports Amid Record Activity Hurt U.S. Manufacturers.
"In addition, firms continue to note challenges with finding talent, and yet, manufacturing job openings have soared to new record levels," NAM said in a press release.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
