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Profit outlook brightens for midsized manufacturers, but spending curbs stay.

According to a nationwide poll conducted late last year by Grant Thornton of 250 manufacturers with sales of $10 million to $500 million, most midsized companies expected 1992 profits to equal or exceed 1991's results. However, if spending for research and development is any guide, owners and managers are still keeping a close rein on spending.

Of the companies polled, 43% expected 1992 profits to exceed those for 1991, compared with 39% in a similar poll conducted in May 1991. Another 44% expected 1992 profits to equal 1991 levels, compared with 32% in May of 1991. Only 12% looked for a profit drop in 1992, compared with 29% in the May 1991 survey.

Despite the better outlook, the number of companies expecting to spend 10% or more of this year's sales on R&D stayed even with 1991's 9%. Companies expecting to spend 5% to 9% of sales on R&D rose slightly to 15% from last year's 12%, while those anticipating R&D expenditures of 1% to 4% of sales went from 39% of those polled to 41%. This year, 21% of the companies polled do not intend to spend any money on R&D, compared with 30% in 1991, and 14% do not know what R&D expenses will be, versus 10% in 1991.
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Journal of Accountancy
Date:May 1, 1992
Words:216
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