Survey: U.S. Manufacturers More Positive About Capital Spending

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Researched by Industrial Info Resources (Sugar Land, Texas)--U.S. manufacturing executives are slightly more positive this quarter regarding capital spending, according to the latest survey results from the National Association of Manufacturers (NAM). Almost 36% of the survey respondents said they anticipate capital spending to increase over the next year, up from 31.2% in the first-quarter survey, NAM reported.

Among all firms, expected capital expenditures over the next year improved from a decline of 0.3% in the first-quarter survey to a gain of 0.6% in June. Industrial Info is tracking 1,298 active U.S. manufacturing projects with a total investment value of $77.46 billion that are expected to kick off in the next 12 months.

Click the icon at right for a graph detailing U.S. manufacturing project kickoffs over the next 12 months by market region.

Medium-sized and large manufacturers predict capital spending increases of 0.7% in the latest survey, but smaller ones anticipate reducing capital spending by 0.1% over the next 12 months.

Manufacturers now anticipate sales to grow 1.6% over the next 12 months, according to the survey, up from 0.4% in the first-quarter survey, but down from 4.5% in December 2015. Likewise, survey respondents now expect full-time employment levels to grow 0.2% over the next year, compared with an expected decline of 0.4% as disclosed in the first-quarter survey. More than 30% anticipate hiring increases in the next 12 months, with 26.4% predicting declining employment.

"With a pickup in demand, businesses are more comfortable in their hiring and capital spending plans, according to this survey," NAM said. "If orders and production continue to improve, we would expect respondents to be more willing to add workers and invest in capital equipment in upcoming surveys."

The association said 61.7% of manufacturers expressed positivity about their own company's outlook, up from 56.6% in the previous survey. "This marks the most optimistic manufacturers have been since December 2015," NAM stated.

The respondents said an unfavorable business climate remained their top challenge, with three-fourths of those surveyed indicating tax and regulatory concerns "as being first and foremost on their minds." More than 82% of the respondents said their company's total spending on state and federal regulatory compliance had "increased either modestly or substantially over the past few years," according to the association. Nearly 56% of the respondents said they would increase capital investments and expenditures if the cost of regulatory compliance were reduced. For related information see March 15, 2016, article - Survey: U.S. Manufacturers Expect to Pull Back Capital Spending Over Next 12 Months.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 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. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.