In spite of continued global headwinds, industrial manufacturers expect revenue to rebound over the next 12 months, according to the latest PwC Manufacturing Barometer. But at the same time, the expected pace of growth is lower than that of a year ago.
The average forecast for respondents in the second-quarter survey was 4.2 percent, compared to 4.9 percent a year ago.
While headwinds identified were varied, most were tied to challenges from the world economy, including the strength of the U.S. dollar in the global market and lack of global demand. The regulatory and legislative environment topped domestic challenges, with 35 percent of respondents concerned about the impact this could have on business in the next year.
On a positive note, oil prices increased from the prior quarter, lessening some of the drag that has had on industrial manufacturers for the last year.
The report notes that industrial manufacturers believe the U.S. remains a more attractive place to operate and invest compared to most worldwide countries. However, that lead is beginning to narrow.
As a result of the economic pressures, investment optimism dipped from the first quarter but remained above a year ago. Forty-three percent of respondents say they are planning major capital investments in the next year, compared to 53 percent in the first quarter and 34 percent in the second quarter of 2015.
But right now may be a great time to invest. Investing in a distribution business, especially during a down economy, helps differentiate it from enterprises focused only on short-term results. Being hyperfocused on what's happening now leaves you ill-prepared for the future – whatever that future may hold.
And one of the best ways to position your company for ongoing investment is to create a strategic plan – one that incorporates the possibilities of worst- and best-case scenarios alongside your base-case scenario. This approach forces you to think about the possibilities but keeps you moving forward. (Learn more in The Little Black Book of Strategic Planning for Distributors, available in the MDM Store.)
