The latest results of theNAM/IndustryWeek Manufacturing Index show that business conditions continued to improve in second quarter of 2010, though in some areas, the pace of the improvement was more moderate than in prior quarters.
Roughly three quarters (74 percent) of the respondents to the second quarter survey reported a positive business outlook. While this was the highest level of confidence in three years and substantially up from the record low of just 28 percent in the first quarter of 2009, the rise from the 70 percent who had a positive business outlook in the prior quarter was the mildest improvement of the current recover to-date.
This signals that while the manufacturing recovery is likely to continue going forward, an accelerating growth path is not likely. This is consistent with other findings of the second quarter survey including expectations of positive, but mild, increases in both capital spending (1.7 percent growth) and employment (1.3 percent growth ) in the year ahead.
Asked if uncertainty about the business outlook is delaying plans to expand employment or capital spending, only a roughly quarter (26 percent) said no. Of the roughly three quarters (74%) who responded that uncertain is a factor, the vast majority — 58% — reported that uncertainty is affecting both employment and capital spending plans.
Of those who reported that uncertainty is affecting their plans to expand capital spending and employment, the main areas of concern cited were the state of the U.S. economic recovery and possible regulatory or legislative changes from Washington D.C.
To see full results of the survey, click here.