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 CLEVELAND, Oct. 29 /PRNewswire/ -- Although most manufacturers in the Great Lakes region expect sales and orders to increase in the fourth quarter, they are still reluctant to hire more employees and build up inventories, a new survey shows. One reason for that reluctance could be that 86 percent of the survey respondents believe that the U.S. economy will continue to experience sluggish growth through next year.
 Of 95 manufacturing companies surveyed by Roulston Research Corporation, 62 percent expect their firms' sales to increase in the fourth quarter, and 64 percent expect a rise in orders. But only 15 percent are planning to bolster their inventory stockpiles, and only 11 percent expect to add to their employment levels. In fact, 40.5 percent anticipate reducing employment during the fourth quarter.
 "These figures indicate that while manufacturers are optimistic about growth, at least for the short term, they still are somewhat hesitant to expand," said Norman F. Klopp, executive vice president, research, for Roulston & Company, Inc. "They are fearful of getting burned by having too much product and too many people on hand if the economy turns downward once again."
 For the third quarter, 54 percent of the survey respondents reported sales were up, and 59 percent said orders increased, but only 16 percent added to their inventories and 16 percent increased employment, while 46 percent reduced employment.
 Roulston conducts the survey twice a year to measure business trends and expectations of Midwest manufacturers located primarily in the Great Lakes states. Other survey results included:
 -- Inflation in the manufacturing sector does not appear to be a problem. Only slightly more firms reported that they were able to increase prices in the third quarter (24 percent) than those who had to lower prices (21 percent). Looking to the fourth quarter, 15 percent expect prices to rise, while 17 percent anticipate falling prices.
 -- Because prices are remaining steady or dropping in most cases, some firms might be feeling their profit margins getting squeezed. Nearly 20 percent of the respondents said they experienced material cost increases during the third quarter. On the other hand, 14 percent reported declines in material costs. About 10 percent expect material costs to rise in the fourth quarter, and 10 percent expect them to fall.
 -- For next year, 86 percent anticipate slow economic growth, while 10.5 percent predict growth will accelerate. Only 3.5 percent expect a recession in 1994.
 -- According to business activity reported by Midwest manufacturers, the economic recession in Europe may be bottoming out. About 14 percent of the respondents said European sales have grown in the past two months, while 43.5 percent said they have been stable. Meanwhile, 49 percent said business with Mexico is growing, and 71 percent said their sales in South America and the Pacific Rim (excluding Japan) are increasing.
 -- Most respondents feel Clinton Administration policies will have no significant impact on their businesses. Those who do feel there will be an impact are overwhelmingly negative. About 46 percent say the administration's policies will hurt the outlook for business, 34 percent say their employment plans are being negatively affected, and 11 percent say they are reducing capital spending plans because of the policies.
 Roulston Research Corporation is a subsidiary of Roulston & Company, Inc., a professional investment management firm and registered investment adviser.
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 /CONTACT: Norman F. Klopp, executive vice president, research, 216-431-3000, or Scott Roulston president, 216-431-3000, both of Roulston & Company; or Fred Buchstein, vice president, of Dix & Eaton, 216-241-0405, for Roulston & Company/

CO: Roulston & Company ST: Ohio IN: FIN SU:

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Publication:PR Newswire
Date:Oct 29, 1993

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