IPA SBRB Study: Confidence of Manufacturing Companies Declines 1.8 Points; Greater Optimism for Revenue Increases Tempered by Decrease in Hiring Expectations

Costs of materials, health care and taxes now greatest concerns according to latest IPA SBRB Poll

Buffalo Grove, IL (December 28, 2006) -- Small and medium-sized manufacturers are slightly less confident for their business prospects over the course of the next 12 months, according to the results of an International Profit Associates Small Business Research Board (IPA SBRB) survey released here today.

The IPA SBRB Manufacturing Confidence Index fell to 43.2, a drop of 1.8 points from the an index of 45 reported in August. The 43. 2, however, is still higher than the IPA Small Business Confidence Index (IPA SBCI) of 42.7 recorded in the latest national survey of "all" business owners and managers.

The cost of materials is now the greatest concern of the manufacturers responding to the poll, replacing the finding of quality employees as the top need. Health care costs, taxes and government regulation follow the cost of materials as the leading issues. Energy and fuel costs are now fifth.

The IPA SBRB has been tracking the attitudes of small businesses since July 2004. This is the second consecutive quarter that results for the manufacturing sector have been reported. The key ingredients for determining the confidence index are attitudes about the direction of the economy, revenue predictions and hiring plans.

Manufacturers are projecting revenues to increase over the next 12 months, with nearly 60% indicating that sales will be higher (compared to 50% during the most previous reporting period). Of that group, slightly more than 43% said they believe revenues over the next 12 months will be more than 10% higher than the current levels.

Nevertheless, these same manufacturing concerns indicated that their hiring expectations have waned since late summer. Less than 30% believe they will be adding employees over the next 12 months, as opposed to the last poll when 38% said they intended to add to their staffing. About 53% said staff levels will remain the same and 7% said they expect staffing decreases.

Concern about the economy also impacted the confidence index. Where nearly half of the manufacturers responded to the previous poll indicated that they are forecasting improvement in the economy over the next 12 months, less than 41% believe the economy is improving.

"Manufacturing companies are entering 2007 with goals similar to nearly every other small business sector -- increase revenue, decrease expense and improve productivity," said" said Gregg Steinberg, President of International Profit Associates, the largest privately-held provider of management consulting and professional services to small and medium-size businesses in North America.

"The forecast for increased revenues would ordinarily accompany projections for increased hiring. That is not the case here. It seems evident that there is going to be significant pressure on maintaining cost control and boosting productivity in order to meet profit goals," Steinberg said.

The International Profit Associates Small Business Research Board ascertains and reports the opinions of small business owners and managers on a wide variety of topics related to their own businesses as well as national and international issues that may impact their operations.

The IPA SBRB research includes studies of specific industry segments, such as Construction & Contracting and Manufacturing. Transportation and Food Service businesses also have been added to that group as a result of the latest survey. The IPA Small Business Research Board will continue to expand upon the base of industries it tracks.

Participants in IPA SBRB polls provide feedback on significant issues and allow for real-time insight into the state of small businesses nationwide. The universe of participants is developed from among small businesses across the United States. IPA SBRB studies are voluntary surveys conducted via phone and email. Polls are structured and supervised through an independent resource.

The latest information about the IPA Small Business Research Board can be found at www.ipasbrb.com.

International Profit Associates, Inc. (IPA) is the largest privately held provider of management consulting services to small and medium-sized businesses in North America. IPA and its more than 1,800 professionals offer a wide range of proven and innovative methodologies to help businesses grow and prosper regardless of the economic cycle.

IPA either provides directly or through its affiliated companies a comprehensive array of business advisory services, tax and estate planning services or merger, acquisition and other financial advisory services in the United States and Canada. More information about IPA can be found at www.ipa-iba.com.