The document summarizes the results of a survey of manufacturing and distribution companies. It finds that while business conditions have improved, some companies still face limited credit availability, especially small companies. New export markets are driving international sales growth. Companies developing new products tend to have higher profit margins. The manufacturing sector continues to face challenges around workforce skills shortages and policy concerns.

1. Manufacturing and Distribution Summit Olympia & Lynnwood, Washington September 14 & 15, 2010

2. National & Washington Survey Results

3. Survey demographics Fifth annual national survey Survey in field March 2 – April 5 1,061 individual company respondents - 69 Washington 68% Mfg / 32% Dist – 85%/15% Washington 84% C level executives – 78% Washington 62% $25 million and above - both Tax policy results issued April 20th Official release of results June 7th

4. Current condition of business

5. “ Thriving and growing” by industry segment

6. Anticipated recovery timeframe

7. Credit availability Overall 19% of respondents report difficulty securing credit 29% of companies <$25M in revenue report the same Southwest U.S. has tightest credit Those reporting lack of available financing also report delayed recovery into 2011 or beyond Companies with $100 – $250 million in revenue have the highest level of worry about future credit availability

8. Top Growth Strategies

9. Export sales

10. Change in export sales

11. Projected health care cost increases

12. Challenges of new product development Survey data indicates those companies introducing new products have higher gross margins

13. Industry segments offering green products

14. Profitability of green products

15. Projected Employment Levels

16. Skilled labor recruiting needs (manufacturing)

17. Concern about pending legislation

18. Concerns about tax increases for pass-through entities

19. Current Manufacturing Situation and Outlook

20. Source: U.S. Department of Commerce Growth in Real Output: U.S. Manufacturing vs. Overall GDP

21. Source: National Association of Manufacturers

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. 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. US is the #3 Manufacturing Exporter 2007, $Billions Compiled by The Manufacturing Institute for the 8th Edition of Facts About Modern Manufacturing

25. Source: National Association of Manufacturers Jobs Supported by Manufacturing Exports

26. The Employment Situation Source: Department of Labor

27. Deeper Recession, Slower Recovery

28. Consumer Confidence Source: Conference Board July 07 (131.2) August 10 (62.7)

29. Source: Commerce Department Mfg Inventory/Sales Ratio

30. Housing Market

31. *SAAR (seasonally-adjusted annual rate) Source: U.S. Department of Commerce, OECD US Trade and the Global Economy

32. Manufacturing Production Source: Federal Reserve

33. Source: Federal Reserve, and NAM Forecast The Manufacturing Outlo ok

34. Source: Department of Commerce, and NAM Forecast The Outlook for GDP

35. Summary Business conditions improved Some limited credit availability especially for smalls New export markets driving international sales growth Capacity increasing Less inventory reduction planned Potential for inflation New product development increases gross margins Go green but understand the cost Workforce skills shortages will only increase Unprecedented concern exist over policy issues

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38. Questions Tom Murphy Executive Vice President RSM McGladrey, Inc. 612-376-9226 [email_address]