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March 2016: Most Manufacturing CEOs See Strong Future Business Conditions Ahead

Good news: Manufacturing CEOs feel that business conditions are improving.

Overall, in Chief Executive’s March 2016 CEO Confidence Index survey, manufacturers rated their expectations of future business conditions 12 months from now a 6.00 on a scale of 1 to 10, with 10 being the highest. That’s a 6% increase compared with a rating of 5.64 given for how they feel business conditions are now.

Overall ManufacturersHowever, those ratings vary greatly when we dig deeper. For example, consumer goods manufacturers have a much better current and future outlook than industrial manufacturers do, which are dealing with global crises such as terrorism in Europe, the economic recession in Greece and the crash of the Chinese stock market. Consumer goods manufacturers, overall rated current conditions a 6.26 and future conditions a 6.44, a slight increase of 3%. And while industrial manufacturers project a larger jump of 8%, they are starting from and ending with a much lower base. Industrial manufacturers only gave a current rating of 5.38, while their future rating was just 5.81.

Overall Manufacturers 2When broken out by company size, the numbers tell an even more fractured story. Large consumer goods manufacturers ($1B+ revenue) had the least positive outlook. Not only did they collectively give the lowest rating compared with midsized and smaller manufacturers, but they were the only segment to see conditions worsening over time, at -11%.

Conversely, large industrial manufacturers were at the opposite end of the continuum, showing the largest expectation of growth, at 17%. Small consumer goods manufacturers had the best outlook overall, rating current conditions 6.71 and future conditions 7.29, a 9% increase.

Overall Manufacturers 3

The impending U.S. presidential election undoubtedly is having an effect on everyone’s outlook, and we can expect the election in November to change these numbers significantly, for better or worse, all around.


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