Prime Advantage, the leading buying consortium for midsized manufacturers, announced the findings of its sixth annual Group CFO Survey, revealing financial projections and top concerns of its member companies’ CFOs in 2014. These CFOs remain optimistic about financial prospects and are focused on growth, as indicated by increased hiring, capital and R&D investments.

Selected Summary of Findings

• Sixty-five percent of CFOs said they were more optimistic about the financial prospects for their companies in 2014.
• For the second year in a row, 72 percent reported that they are planning capital expenditures in computer hardware and software, indicating a strong and sustained commitment to technology investments by small and midsized manufacturers.
• The top three areas for planned capital expenditures are manufacturing equipment (86 percent), computer hardware (72 percent) and computer software (61 percent).

Sixty-five percent of respondents reported that they were more optimistic than they were last year about their companies’ financial prospects for the coming year (a slight increase from 2013’s result of 64 percent and stronger than the 46 percent surveyed in the December 2013 Duke/CFO Business Outlook survey).
 
Optimism about the U.S. economy remains, but it is a bit more tepid. Forty-six percent of CFOs feel more optimistic about the U.S. economy and 41 percent feel the same as in 2013. Fourteen percent feel less optimistic about the U.S. economy this year. Nearly all CFOs (97 percent) believe U.S. manufacturing will expand or stay the same (43 percent) in 2013. These numbers are very close to last year’s CFO survey, when 56 percent predicted expansion for the U.S. economy and 96 percent said the economy would either stay the same or expand.
 
The level of optimism that CFOs have about their own companies continues to climb. Eighty-nine percent of respondents rated their optimism about financial prospects for their own companies as moderate to high, up from 72 percent in 2013 and a 27 percentage point increase from projections in 2012.

Cutting operational costs and developing new products and services, the top priority cited in both the 2013 and 2012 CFO surveys, retained its position for 2014. The other top priorities are seeking new markets for products and services, cited by 62 percent of respondents, and developing new products and services in response to changing consumption patterns, cited by 54 percent of respondents.

Prime Advantage member companies are again planning to increase the number of domestic employees in the year ahead, as indicated by 65 percent of respondents (up from 55 percent in 2013). Three in four companies are planning to increase wages and salaries this year. Steady corporate employment plans have also appeared in other recent industry surveys, such as Bank of America/Merrill Lynch’s 2014 CFO Outlook and Duke/CFO Business Outlook survey.

Yet, companies are still struggling with finding skilled labor, as 65 percent of CFOs report having open positions that are difficult to fill because of a lack of available skilled workers. The top three areas for planned capital expenditures are manufacturing equipment (86 percent), computer hardware (72 percent) and computer software (61 percent).
 
“The manufacturing sector has continued to show healthy growth over the past few years, and we are so pleased that the midsized industrial manufacturing market contributes to this trend. To see continued growth in revenue, capital expenditures and hiring expectations, following another strong year in 2013, is a testament to the strength of the manufacturing sector and its importance to the overall U.S. economy,” said Louise O’Sullivan, founder, president and CEO of Prime Advantage.

To read the full press release, click here.