March 2010

Optimism Jumps Among Manufacturing Finance Execs; Partner, Paul Oetter, tells us why

Paul Oetter, Partner in Charge of Blackman Kallick's Manufacturing and Distribution Practice, distills the takeaways from Journal of Accountancy article, Optimism Jumps Among Manufacturing Finance Execs.

Results from the Economic Outlook Survey Q1 2010, conducted by the AICPA and the University of North Carolina’s Kenan-Flagler Business School, indicate there is a possibility that manufacturing may help lead the economy out of recession.  Manufacturing respondents to the survey have a more optimistic view of their prospects than business in general.  Some of the reasons include:

• Stronger sales due to pent up demand, inventory replenishment, and demand for US goods from foreign countries
• Aggressive restructuring during the recession has left many manufacturing companies poised to be profitable with relatively modest increases in sales

Some other key points of note:

• Caution still prevails.  Companies find forecasting very difficult in a period where so much economic uncertainty exists and where events halfway across the world can impact our economy.
• Businesses are generally more interested in efforts to make bank lending more readily available than they are in government spending initiatives to kick-start economic activity.