Manufacturing and Distribution Summit Olympia & Lynnwood, Washington September 14 & 15, 2010
National & Washington Survey Results
Survey demographics <ul><li>Fifth annual national survey </li></ul><ul><li>Survey in field March 2 – April 5 </li></ul><ul...
Current condition of business
“ Thriving and growing” by industry segment
Anticipated recovery timeframe
Credit availability <ul><li>Overall 19% of respondents report difficulty securing credit </li></ul><ul><li>29% of companie...
Top Growth Strategies
Export sales
Change in export sales
Projected health care cost increases
Challenges of new product development Survey data indicates those companies introducing new products have higher gross mar...
Industry segments offering green products
Profitability of green products
Projected Employment Levels
Skilled labor recruiting needs (manufacturing)
Concern about pending legislation
Concerns about tax increases for pass-through entities
Current Manufacturing Situation and Outlook
Source:  U.S. Department of Commerce Growth in Real Output: U.S. Manufacturing vs. Overall GDP
Source: National Association of Manufacturers
Manufacturing Drives Productivity Growth Source: U.S. Bureau of Labor Statistics Compiled by The Manufacturing Institute f...
The United States leads the way in innovation Source: U.S. Patent and Trademark Office Compiled by The Manufacturing Insti...
US is the #3 Manufacturing Exporter 2007, $Billions  Compiled by The Manufacturing Institute for the 8th Edition of Facts ...
Source: National Association of Manufacturers Jobs  Supported by Manufacturing Exports
The Employment Situation Source: Department of Labor
Deeper Recession, Slower Recovery
Consumer Confidence  Source:  Conference Board July 07 (131.2) August 10 (62.7)
Source:  Commerce Department Mfg Inventory/Sales Ratio
Housing Market
*SAAR (seasonally-adjusted annual rate) Source:  U.S. Department of Commerce, OECD US Trade and the Global Economy
Manufacturing Production Source:  Federal Reserve
Source:  Federal Reserve, and NAM Forecast The Manufacturing Outlo ok
Source:  Department of Commerce, and NAM Forecast The Outlook for GDP
Summary <ul><li>Business conditions improved </li></ul><ul><li>Some limited credit availability especially for smalls </li...
Experience the power of  being understood. SM Note our new web address: www.mcgladrey.com
Continue the conversation http//mfgblog.mcgladrey.com
Questions <ul><li>Tom Murphy </li></ul><ul><li>Executive Vice President </li></ul><ul><li>RSM McGladrey, Inc. </li></ul><u...
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Manufacturing Survey

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  • Survey participants represent more of the upper end of the middle market
  • All improved from 2009 Led by F&amp;B, Medical Trailing Fab Metal, Bldg Mat’ls Trans Equip, Chem &gt; 2008
  • Recovery will be long and slow. Most likely will not be back to 2007 levels until 2013.
  • Overall, unprecedented levels of concern.
  • Rising exports not only support manufacturing jobs, but jobs in other sectors as well. In 2003, manufactured exports supported a total of 5 million jobs. Roughly half (2.4 mil) in manufacturing and half (2.6 mil) in other sectors , like business services, transportation, wholesale trade and agriculture. By 2008 manufactured exports supported close to 7 million jobs (6.8 mil), a 34 percent increase in just 5 years. While export increase created 446,000 new manufacturing jobs, the number of mfg jobs . Three quarters of the new jobs created by the rise in manufactured exports (1.3 million) were in jobs outside of manufacturing. This is 28 percent of the 4.7 mil increase in private sector employment (outside of mfg) during this time
  • Gross Domestic Product Private Domestic Final Sales (GDP less Gov, Inventories and Net Exports) 2007.1 0.1 2.19 2007.2 4.8 1.9 2007.3 4.8 1.33 2007.4 -0.2 -0.3 2008.1 0.9 -0.2 2008.2 2.8 0.6 2008.3 -0.5 -3.5 2008.4 -6.3 -7.4 2009.1 -5.5 -6 2009.2 -1.8 -3.5 2009.3 1.1 -1.1 2009.4 0.2 -0.7 2010.1 1.2 0.6 2010.2 2 1.7 2010.3 2.9 2.7
  • Manufacturing Survey

    1. 1. Manufacturing and Distribution Summit Olympia & Lynnwood, Washington September 14 & 15, 2010
    2. 2. National & Washington Survey Results
    3. 3. Survey demographics <ul><li>Fifth annual national survey </li></ul><ul><li>Survey in field March 2 – April 5 </li></ul><ul><li>1,061 individual company respondents - 69 Washington </li></ul><ul><li>68% Mfg / 32% Dist – 85%/15% Washington </li></ul><ul><li>84% C level executives – 78% Washington </li></ul><ul><li>62% $25 million and above - both </li></ul><ul><li>Tax policy results issued April 20th </li></ul><ul><li>Official release of results June 7th </li></ul>
    4. 4. Current condition of business
    5. 5. “ Thriving and growing” by industry segment
    6. 6. Anticipated recovery timeframe
    7. 7. Credit availability <ul><li>Overall 19% of respondents report difficulty securing credit </li></ul><ul><li>29% of companies <$25M in revenue report the same </li></ul><ul><li>Southwest U.S. has tightest credit </li></ul><ul><li>Those reporting lack of available financing also report delayed recovery into 2011 or beyond </li></ul><ul><li>Companies with $100 – $250 million in revenue have the highest level of worry about future credit availability </li></ul>
    8. 8. Top Growth Strategies
    9. 9. Export sales
    10. 10. Change in export sales
    11. 11. Projected health care cost increases
    12. 12. Challenges of new product development Survey data indicates those companies introducing new products have higher gross margins
    13. 13. Industry segments offering green products
    14. 14. Profitability of green products
    15. 15. Projected Employment Levels
    16. 16. Skilled labor recruiting needs (manufacturing)
    17. 17. Concern about pending legislation
    18. 18. Concerns about tax increases for pass-through entities
    19. 19. Current Manufacturing Situation and Outlook
    20. 20. Source: U.S. Department of Commerce Growth in Real Output: U.S. Manufacturing vs. Overall GDP
    21. 21. Source: National Association of Manufacturers
    22. 22. Manufacturing Drives Productivity Growth Source: U.S. Bureau of Labor Statistics Compiled by The Manufacturing Institute for the 8th Edition of Facts About Modern Manufacturing
    23. 23. The United States leads the way in innovation Source: U.S. Patent and Trademark Office Compiled by The Manufacturing Institute for the 8th Edition of Facts About Modern Manufacturing
    24. 24. US is the #3 Manufacturing Exporter 2007, $Billions Compiled by The Manufacturing Institute for the 8th Edition of Facts About Modern Manufacturing
    25. 25. Source: National Association of Manufacturers Jobs Supported by Manufacturing Exports
    26. 26. The Employment Situation Source: Department of Labor
    27. 27. Deeper Recession, Slower Recovery
    28. 28. Consumer Confidence Source: Conference Board July 07 (131.2) August 10 (62.7)
    29. 29. Source: Commerce Department Mfg Inventory/Sales Ratio
    30. 30. Housing Market
    31. 31. *SAAR (seasonally-adjusted annual rate) Source: U.S. Department of Commerce, OECD US Trade and the Global Economy
    32. 32. Manufacturing Production Source: Federal Reserve
    33. 33. Source: Federal Reserve, and NAM Forecast The Manufacturing Outlo ok
    34. 34. Source: Department of Commerce, and NAM Forecast The Outlook for GDP
    35. 35. Summary <ul><li>Business conditions improved </li></ul><ul><li>Some limited credit availability especially for smalls </li></ul><ul><li>New export markets driving international sales growth </li></ul><ul><li>Capacity increasing </li></ul><ul><li>Less inventory reduction planned </li></ul><ul><li>Potential for inflation </li></ul><ul><li>New product development increases gross margins </li></ul><ul><li>Go green but understand the cost </li></ul><ul><li>Workforce skills shortages will only increase </li></ul><ul><li>Unprecedented concern exist over policy issues </li></ul>
    36. 36. Experience the power of being understood. SM Note our new web address: www.mcgladrey.com
    37. 37. Continue the conversation http//mfgblog.mcgladrey.com
    38. 38. Questions <ul><li>Tom Murphy </li></ul><ul><li>Executive Vice President </li></ul><ul><li>RSM McGladrey, Inc. </li></ul><ul><li>612-376-9226 </li></ul><ul><li>[email_address] </li></ul>
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