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Midsized manufacturers wary, despite higher profits.

A Grant Thornton survey of 251 top executives of midsized manufacturing companies (those with sales of $10 million to $500 million) found the manufacturers in a cautious mood, despite expectations of higher profits for midsized companies for both 1992 and 1993.

Concerning their earnings, 55% of the companies surveyed expected to report higher profits for 1992 and 68% forecast an increase for 1993. Only 20% of the manufacturers anticipated lower earnings for 1992 and just 7% projected an earnings decline in 1993. Twenty-four percent of the companies expected no profit change in 1992 and the same percentage looked for stable profits in 1993. The remaining 1% were unsure about 1992 and 1993 profit levels.

Concerning the outlook for the economy, only 12% of the executives said the United States was well on its way to recovery. Of those who said it was not, only 3% thought the recession ended in 1992 and 16% expected a recovery in the first half of 1993. While 44% looked for a rebound in the second half of 1993, 29% thought the upturn would not occur until 1994 at the earliest. The remaining 8% were not sure.

When asked about the impact of the Clinton administration, 46% of the manufacturers said they felt less optimistic about the prospects for manufacturing in general and 39% were less optimistic about their own companies' prospects. This compares with 24% who were more optimistic about the prospects for the economy in general and 18% who were more optimistic about the prospects for their companies. Twenty percent thought the Clinton election

would have no impact on manufacturing in general and 35% thought it would have no impact on their companies. Ten percent were not sure of the election's impact on manufacturing in general and 8% were not sure of its impact on their companies.
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Article Details
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Publication:Journal of Accountancy
Article Type:Brief Article
Date:Mar 1, 1993
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