E&S Manufacturers’ CFOs Are Optimistic About Economy, Investment Plans

“More optimistic” is the way Prime Advantage, the Chicago-based buying organization, described the results of its third annual Group CFO Survey, released last month. The group includes a significant number of foodservice equipment and supplies manufacturers.

Of the chief financial officers surveyed, 74% said they are more optimistic about the economy, up from 67% in 2010, and 67% are more optimistic about their company’s financial prospects this year, a rise from 64%  in last year’s survey. The Prime Advantage financial executives are also more optimistic about their companies’ prospects than CFOs at a similar, more broad-based survey conducted annually by Duke University and CFO magazine. Only 56% of the CFOs in that survey are “optimistic.”

This upbeat outlook is leading the CFOs’ companies to plan increased investments in capital equipment, computer hardware, research and development, and new personnel. Nearly 90% of those polled plan to buy new manufacturing equipment and 56% are looking to upgrade computer hardware. Nearly 40% plan to increase spending on new product development this year.

While 72% of those surveyed by Prime Advantage expect to hire new personnel during ’11, and all plan to maintain or grow their workforces, the rising cost of healthcare and a shortage of skilled labor, especially skilled machine operators, may dampen some of that hiring.

But the CFOs are also clear that the U.S. and global economies remain dynamic. The top priority for the polled CFOs this year is “ensuring a quick response to changing economic environments.” Still, in a sign of their more upbeat outlook, “cutting operational costs,” the top priority last year, fell to third place.

“The optimism expressed by our small and mid-sized members for a more robust 2011 may be a sign of strong growth in the years ahead for the manufacturing community, despite the challenges,” said Prime Advantage Pres. and CEO Louise O’Sullivan.