Confidence among large manufacturers eroded in the second quarter of 2008, according to a survey conducted jointly by the National Association of Manufacturers (NAM) and Industry Week magazine.
“Only 38% of large manufacturing companies that responded to the second-quarter survey had a positive business outlook for their company,” said NAM chief economist David Huether. “This marks the lowest confidence level in the history of the survey going back to the fourth quarter of 1997.”
For small respondents, the 3% drop in optimism from the 70% of survey respondents in the first quarter of 2008 to 67% in the second quarter marked the fourth decline in the past six quarters. The level of optimism in the second quarter was the lowest level since the second quarter of 2003, but significantly elevated compared with the 2000-2001 time frame.
Results of the second-quarter survey are based on responses of 314 NAM member companies.
Asked if the United States economy would go through a recession in 2008, slightly more than one-third (37%) answered yes. This is less than the 50 percent of survey respondents who expected a 2008 recession in the first quarter survey. Twenty-five percent answered no and 38 percent answered maybe.
Survey respondents were also asked how they were being affected by the rising cost of imports. A full 79% of survey respondents reported that inflationary pressures from overseas have spilled over into the domestic economy in the form of “increased costs of materials and supplies purchased domestically,” 59% reported “increased costs of materials and supplies imported from abroad,” 30% reported “more purchases are being sourced domestically,” and 22% reported “eased import competition” as well as “increased pricing power.”