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

By Rob Starr, Content Manager, Big4.com

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, according to newly released data from the McGladrey Manufacturing and Distribution Monitor Update.

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.

“Middle market manufacturers and distributors are approaching 2013 cautiously after a rough end to 2012,” said Karen Kurek, national manufacturing and distribution practice leader for McGladrey. “The results of this year-end survey make clear that these companies remain vulnerable to the volatility and uncertainty that have come to define the post-recession marketplace. While it is still possible that last year’s impasse will have a negative impact on both industries through the beginning of the year, the tax deal reached in early January may help restore confidence and spur investment in innovation; specifically related to the R&D tax credit renewal. ”

The McGladrey Manufacturing and Distribution Monitor surveys industry leaders to assess the current state of the industry and to determine what steps CEOs, CFOs and other executives are taking to grow their businesses and stay competitive. All data is collected online in response to invitations from McGladrey and from partnering associations and chambers of commerce across the United States.

 

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