In its latest “Automotive Supplier Barometer” report, the Original Equipment Suppliers Association indicated mostly improved optimism about the current state of business. Survey respondents say this is primarily due to improved production trends as well as a “less pessimistic” outlook for the short-to-near-term.
Following are some highlights from the report:
- The OESA Automotive Supplier Barometer sentiment index increased to 52 in November—up from 37 in September. The shift was influenced from both spectrums of the two-month outlook; the “somewhat more optimistic sentiment” increased from 16 to 25 percent, and the “somewhat more pessimistic” sentiment decreased from 55 to 16 percent. Note: Optimism increased across most revenue groups, with the exception of companies generating $50–150 million in annual revenue.
- Staffing levels planned over the next six months still indicate that most respondent companies will be hiring for corporate engineering and technical, hourly production and skilled trade workers. For companies that do plan to add staff, the two areas where most are having trouble finding qualified, available candidates is in engineering/technical and skilled trades. Both show an increase in the number of companies having trouble finding candidates compared with this time last year.
- Investment plans for 2012 continue to remain positive with increasing spend rates as follows: 75 percent of respondents plan to increase investment in plant and equipment; 61 percent in research and development; and 74 percent in talent and training. Fewer companies—or 43 percent—plan to increase investment in information technology.
- Manufacturing localization is strong, with 84 percent of respondent companies seeing an increase in localization activity from their customers and 58 percent are pursuing manufacturing localization with their supply base. Factors influencing this move include recent natural disasters and associated supply chain interruptions, along with declining dollar value against other currencies.
- As an alternative to adding in-house manufacturing capacity, 41 percent of respondents indicated their company would consider outsourcing or subcontracting work when necessary volumes are reached. More than half, or 59 percent, said outsourcing is either not anticipated, unlikely, or not a strategic fit.
The complete November OESA Automotive Supplier Barometer report is available online.