Economic Growth to Resume in 2010-Plan to React

Economic growth in the United States will resume in 2010, say the nation’s purchasing and supply management executives in their December 2009 Semiannual Economic Forecast. Expectations for 2010 are for the positive conditions experienced in the second half of 2009 to continue in manufacturing, while the non-manufacturing sector foresees marginal growth according to the report.

The general forecast projects optimism about the U.S. economy for 2010. Overall, the manufacturing sector especially has positive prospects on tap for 2010 with revenues expected to increase in 13 of 18 industries, including for printing and related services, while the non-manufacturing sector appears slightly less positive about the year ahead with just eight of 18 industries expecting higher revenues. Printing is also among a list of four industries showing increases in capital expenditures for 2009. Conversely, business investment, a major driver in the U.S. economy, is expected to decline as each sector expects a combined average decline of 5.4 percent in capital spending. These projections are part of the forecast issued by the Business Survey Committee of the Institute for Supply Management (ISM) (www.ism.ws).

Some 60 percent of survey respondents expect revenues to be greater in 2010 than in 2009. The panel of purchasing and supply executives expects a 5.7 percent net increase in overall revenues for 2010, compared to a 10.7 percent decrease reported for 2009.

“Manufacturing purchasing and supply executives reflect more of their typical optimism about their organizations’ prospects as they consider the first half of 2010 and are even more positive about the second half,” said Norbert Ore, chair of the ISM Manufacturing Business Survey Committee. “While 2009 has been a challenging year overall, we are in a growth trend. Respondents expect cost pressures to be low to moderate based on their price forecast. Manufacturing growth is now in its fourth consecutive month.”

The panel also predicts that the prices nearly all manufacturers will pay will increase 0.2 percent during the first four months of 2010, and then increase an additional 2.4 percent during the balance of 2010. This should translate into an across-the-board price increase of 2.6 percent for 2010. Respondents’ major business concerns for the year ahead are: an overall weak economy, an ongoing credit crisis, rising taxes, a possible interest rate hike and increasing energy costs. On the flip side however, survey respondents expect to realize supply-chain improvements through such phenomena as supplier consolidation, new and/or improved enterprise technology and system utilization, more efficient inventory and asset management, leaner manufacturing and further cost reduction/containment.

A NYC Printer Reacts and Prepares

One New York-based printer is planning to capitalize on this optimistic outlook. Based in a highly competitive market, this firm disclosed its 2010 marketing plan under the condition of anonymity. Part of its plan is to promote its many capabilities including, but not limited to, its technologically advanced services (i.e., Kodak proofing systems), personnel (seasoned CSR Team), combined staff experience, pricing and mid-Manhattan location on a local and national basis. It is also planning to aggressively promote its “minority-owned” status, hoping this will help it connect with large corporations that seek to do a portion of their business with minority-owned firms. Going a step further, the company has identified six specific markets to increase its presence: alcoholic beverages, cosmetics, fashion, jewelry, pharmaceuticals and retail. It has some experience providingprinting and related services such as pre-press to each of these industries. It hopes to use these experiences as a “stepping stone” to secure greater assignments from these industry groups in the New Year. It’s also hiring its first public relations firm.