An annual snapshot of the U.S. manufacturing and distribution sector shows that industry executives are generally optimistic about their firms' growth potential, but are wary of threats posed by increased government regulation.


According to the 2013 McGladrey Manufacturing and Distribution Monitormanufacturers and distributors nationwide have high hopes for the next 12 months. A majority of respondents reported positive outlooks for both domestic and international sales in the next year, with 83 percent expecting increases in U.S. sales and 63 percent projecting sales increases in foreign markets. The employment outlook is also encouraging, with nearly two-thirds of the survey respondents expecting to add jobs in the next year.


However, government regulation in general was the most commonly cited threat, with nearly three-quarters (74 percent) of respondents indicating that they expected it to limit their growth over the next 12 months. Health care overhaul implementation was a close second (71 percent), followed by Social Security/Medicare payroll taxes (69 percent) and the federal deficit (67 percent).


The recently completed survey includes responses of 1,067 industry executives, including 36 from Iowa companies.


A majority of the Iowa companies that responded to the survey expect their employee levels to remain the same or increase in the next 12 months, said Chris Anderson, a tax partner at McGladrey's Des Moines office, in a press release. Iowa appears to have a similar percentage of declining companies (11 percent) as the national trend, fewer that are holding steady, and more that are thriving, he said.


"Nine percent of those responding actually anticipate employee levels to increase by more than 11 percent," Anderson said. Iowa executives also agree with their colleagues across the country that regulatory and policy roadblocks are the biggest threats to growth, he said. To access the state report, click here.


Among other findings from the survey:

·         More than half (57 percent) of respondents expect the "skills shortage" to limit growth over the next year.

·         The "onshoring" trend of companies bringing manufacturing jobs back to the United States has not caught on in the middle market. Only 14 percent of respondents said they are considering bringing overseas operations back to the U.S. over the next 12 months.

·         More companies are planning to invest in information technology than in any other area. Seventy-nine percent of respondents said they intend to increase IT spending in the next 12 months, more than any other category of investment. The average spending increase forecast in IT (12 percent) was also higher than any other category.