The business outlook for manufacturers plummeted in the first quarter of 2009. Just 28 percent of survey respondents to the NAM/Industry Week Manufacturing Index* had a positive business outlook. While the first quarter results marked a new record low in confidence, the pace of the first quarter decline was milder than the declines that took place during the prior three quarters, indicating that the pace of the economic downturn may be moderating. Still, share of respondents with a negative outlook (72 percent in the first quarter) was nearly double the 37 percent reporting a negative outlook a year earlier in the first quarter of 2008.
The first quarter results of the NAM/IndustryWeek Manufacturing Index show that the manufacturing sector remains in a deep recession and prospects for a near-term recovery are dim: The 12-month outlook for sales, pricing power, investment, inventories, employment and wage growth all fell to their lowest levels on record (since the fourth quarter of 1997) in the first quarter of 2009.
Asked how long a downturn in production will last from their company’s perspective, the majority (60 percent of total respondents) expect a downturn in production will continue into 2010. A fifth (20 percent of total respondents) expects production declines to extend into the second half of 2009. The remaining 20 percent either expect the downturn to end in the first quarter of this year or are not experiencing an outright decline in production.
*a quarterly survey of NAM member companies. Results of the first quarter survey are based on responses of 504 members of the National Association of Manufacturers (NAM).