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Survey: Manufacturers lose revenue, yet remain optimistic


A new survey shows that manufacturing, a mainstay of the area’s economy, remains conflicted and unsettled after the Great Recession.

The survey found that while some manufacturers report seeing less revenue this year, they remain optimistic about the future.

The survey, sponsored by Clark Schaefer Hackett and the Dayton Region Manufacturers Association, found that 21 percent of the companies that generate less than $5 million a year in sales reported their revenue is falling. Clark Schaefer Hackett partner Dennis McLaughlin called the finding “somewhat alarming.”

The survey also found the need for talent remains a top concern, but 58 percent said they’re unlikely to do more employee training.

Still, half of responding businesses said their company’s overall health is improving, 42 percent reported they are maintaining their current strength and 8 percent said their business health is worsening.

That’s an improvement over the 43 percent who last year said their company’s health is improving. Also in 2012, 47 percent said their business was holding steady while 10 percent said business was declining.

McLaughlin said business owners may see positive factors that surveys don’t immediately reflect. Perhaps companies feel they’re doing better than competitors. Some sectors are doing better than others. Aircraft parts producers are likely to be more optimistic than other industry sectors, he said.

“’Health’ is a subjective term,” he said at a manufacturing forum at the University of Dayton’s River Campus on Tuesday. “I guess it’s important to give that consideration.”

Fifty-eight percent of responding companies said they saw no revenue growth in the past year, while 42 percent said they saw growth. That latter percentage is down markedly from last year, when 81 percent said they enjoyed revenue growth, McLaughlin said.

In fact, the 42 percent figure is lower than in any year since 2010, the survey said.

“That’s somewhat shocking,” McLaughlin said.

The top three concerns for regional manufacturers were familiar, however. They are health care costs, pricing pressure from customers and a shortage of talented workers, the same trio of concerns as in 2012 and 2011, the survey said.

Equal percentages of responding companies plan to hire additional workers and don’t plan to hire, the survey found. Forty-four percent of respondents saying it is unlikely that they will hire workers in the coming year. Another 44 percent said they will hire, while 12 percent simply weren’t sure about hiring plans.

“The overall response to this question is neutral,” McLaughlin said.

Ray Attiyah, a manufacturing consultant speaking at the forum, said that with 44 percent unwilling to hire, that reflects a lack of confidence that there will be “sustained levels of growth.”

Richard Stock, director of the University of Dayton Business Research Group, said the 44 percent figure does not surprise him. Stock in the past has said that the Dayton area has been the “leading, bleeding edge of manufacturing in terms of job losses.” The Dayton area lost manufacturing plants from 2007-2009 that it might have lost over an eight- to 10-year period, without the recession speeding that process, he has said.

Sixty-eight percent of respondents plan to invest in production equipment next year, and 58 percent plan to invest in information technology, the survey found. Thirty-seven percent plan to invest in plant or facilities.



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