Manufacturing and Distribution: State of the Industry

Following the worst recession in years, businesses in the manufacturing and wholesale distribution industries are reporting encouraging improvements in overall business conditions.  According to a 2010 survey of 1,061 executives and managers of manufacturing and wholesale distribution enterprises conducted by RSM McGladrey, Inc. the industry is showing signs of life and appears to be on the rebound after a tough couple of years.

Source: McGladrey 2010 Manufacturing and Wholesale Distribution National Survey

The hottest segments within the industry is Food and Beverage, in which nearly 50% of executives report “thriving and growing” this year. The two closely  following segments are Medical (37%) and Chemical (33%). Unfortunately the outlook has not improved in all segments, as only 5% of Transportation executives report such prosperity.

The survey also indicated that the key driver to company health out of the downturn is size. For example 19% of companies with less than $25 million in revenue reports thriving and growing; whereas 32% of c0mpanies with $500+ million in revenue reports thriving and growing. Clearly, as company size increases, the outlook improves.

Source: McGladrey 2010 Manufacturing and Wholesale Distribution National Survey

In 2010, only 10% of executives in the industry say their business is declining.  This number is down drastically from the reported 40%  in 2009.  In general, 2010 was a year of recovery and growth for much of the industry.