Chief financial officers at manufacturing companies seem a little schizophrenic these days.
On the one hand, despite daily signs of an improving economy less than a majority (45 percent) are actually forecasting expansion for their industry in 2011. What's more, this is down sharply from the 59 percent reported last year, according to Bank of America Merrill Lynch's recently released 2011 CFO Outlook.
The companies that are the most optimistic about manufacturing sector expansion are those with revenues of $200 million to $499 million (53 percent) and those with revenues of $500 million to $2 billion (52 percent).
Midwest-based companies (51 percent) are also optimistic.
However, when it comes to hiring the CFOs at manufacturing companies are actually upbeat.
According to the survey, currently 46 percent of manufacturing companies are planning to hire either permanent or contract employees while exactly half are planning no changes. In last year's survey, however, just 28 percent reported that they were planning to hire new employees and 62 percent were making no changes to the size of their workforce.
"This dramatic turnaround bodes well for the US manufacturing sector," the survey report states.
The hiring plans in the manufacturing sector are only one percentage point lower than the hiring plans of services and commodities companies; 47 percent of which said they will expand their staff in 2011.
If you drill through the report, however, manufacturing companies seem optimistic in other areas as well.For example, just 26 percent expect their cost of capital to increase in 2011, down significantly from 48 percent in 2010 and 42 percent in 2009. No doubt the improving economy accounts for this optimism.