Forecast: It's Getting Better

Every year, Gardner Publications (parent company of Modern Machine Shop) conducts a Capital Spending Survey. We've done this survey for 37 years, which gives us a good history to use in analysis.

Columns From: 9/1/2004 Modern Machine Shop, ,

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Chris Koepfer

Every year, Gardner Publications (parent company of Modern Machine Shop) conducts a Capital Spending Survey. We've done this survey for 37 years, which gives us a good history to use in analysis.

We send a questionnaire to 10,000 metalworking businesses of various sizes and across numerous industries. The questions involve capital equipment expenditure plans for the upcoming year—2005 in this case. The surveys were sent in July, and they are starting to come back to us.

Preliminary results for the 2005 survey look much better than they have the past 4 years. (The full survey will be available in mid-September.) I see this as good news on a couple of fronts.

Obviously, for capital equipment manufacturers, a better business climate translates into improved sales. The timing of what appears to be an increase in industry confidence is especially handy because of the upcoming IMTS exhibition in Chicago. It could be a very good show for selling new, cost-effective manufacturing technology to help U.S. companies compete better.

Increased confidence, as indicated by increased capital spending plans, seems to speak to the issue of manufacturing's viability in the future. It appears that the message is getting through to businesses that making things here has a future.

Manufacturing has always moved around looking for lower cost, better exchange rates, less stringent environmental laws and other "business" reasons. What's been constant, however, is that with each wave of migration, there is an opportunity to increase the overall manufacturing competency of the economy, thereby making manufacturing more attractive because of higher value-added content.
I think this is what the preliminary results of our Capital Spending Survey are telling us. Manufacturing is poised to invest in itself again, and those investments will have a positive effect on all of us involved in the metalworking industry.

Forecasting is a tricky business. Trying to see and extrapolate the future is part science, part experience and part hope. One of the interesting things that have come out of our annual survey over time has been how closely it has mirrored the actual economic numbers. Granted, the numbers from the past few surveys have not made us happy, but they have been pretty close to reality. So as we continue to process the results for spending plans in 2005, we can't help being somewhat optimistic. For more information about the Capital Spending Survey, go to www.gardnerweb.com/reports.html.

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