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McGladrey: Survey Finds Manufacturers, Distributors Hurt By Economic Uncertainty Going into 2013

According to newly released data from the McGladrey Manufacturing and Distribution Monitor Update, the months of stagnation and uncertainty that preceded January 2013’s tax deal had a negative impact on optimism and growth projections in the manufacturing and distribution industries at the end of 2012.

Less than a year later, that optimism has been clearly tempered. By the end of 2012, the number of respondents reporting that their businesses were thriving had dropped to 25 percent, down from 39 percent in the spring of 2012 and 45 percent in 2011. Even more troubling, the number of companies reporting they were in a state of decline more than doubled since the spring of 2012 – reaching its highest level (12 percent) since the darkest days of the economic crisis in 2009. The number of respondents expressing optimism about their own companies dropped from 83 percent to 70 percent, and those with pessimistic outlooks for their firms rose from 16 percent to 29 percent.

Many survey participants said that uncertainty about the tax code and fiscal issues had a negative impact on their companies, consumer confidence and the business environment in general. Others identified more conventional business factors – such as limited capital, talent shortage, and volatile material and component prices – as contributing factors to the current trend of decline.

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