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McGladrey: Industrial Sector Plans To Add Jobs Amid Growing Optimism

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McGladrey: Industrial Sector Plans To Add Jobs Amid Growing Optimism

Executives optimistic about growth, but see regulation as biggest impediment

Nine out of 10 executives at small and mid-size manufacturing and distribution companies expect solid growth over the next 12 months and two-thirds plan to add jobs during that period, according to a survey released by middle market professional services firm McGladrey.

In 2014, industrial sector executives report that they are already coming off a strong year but expect even better results over the next 12 months. While an already-healthy majority of executives (69%) reported increases in domestic sales over the past year, 88% expect the next 12 months to bring further growth, with an average projected increase of eight percent. In addition, two-thirds reported that they expect their profit (before taxes and interest) to rise over the next year, with nearly a quarter expecting increases of more than 10 percent. 

"Manufacturing and distribution executives have made it clear that they are being held back by a regulatory and tax landscape that seems to grow both more complicated and less certain each year."

The survey indicates that these expected bottom line improvements will also mean good things for the job market. Two-thirds of respondents indicated that they expect to hire more employees in the U.S. over the next year, up from 62% in 2013. The average expected increase in U.S. employees was six percent, up from four percent in 2013. Importantly, the number of executives expecting to cut back in U.S. employment dropped to five percent after hovering between 9% and 11% for the past three years.

"This year's survey suggests that we will be celebrating more than just improved balance sheets over the next twelve months," said Karen Kurek, national  industrial products practice leader for McGladrey. "Not only are we seeing a healthy majority of executives planning to turn improved financial results into more jobs, we are seeing a significant drop in the number of companies expecting to cut employees for the first time in several years, suggesting that the influence of the economic downturn may truly be waning."

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