The recent KPMG business outlook survey that has surveyed 1,800 manufacturing sector firms across the Bric region (Brazil, Russia, India and China) shows buoyant levels of confidence regarding business activity prospects over the next 12 months.
Key points that come out from latest manufacturing outlook survey: manufacturing firms across the Bric area expect to maintain rapid growth over the next 12 months; strong growth of incoming new business is set to support marked expansion of activity; confidence regarding activity is the most buoyant amongst Brazilian manufacturers. Higher revenues and profits are expected, facilitating increased investment in capital expenditure and R&D.
Employment at Bric manufacturing firms is predicted to increase sharply, in line with higher workloads. Price pressures are expected to intensify over the next 12 months, with input and output price inflation set to accelerate. Firms anticipate rises in their stocks of finished goods to output ratios, as inventories are boosted in line with expected higher levels of demand.
Meanwhile, 70% of survey respondents anticipate a rise in activity levels at their firms over the coming year, whilst just 6% expect a decline. Brazilian companies were the most optimistic about the outlook for activity, while positive sentiment was least amongst Chinese firms.
Revenues at Bric manufacturers are also expected to rise in the coming year, with about 71% of the panelists anticipating an increase in the value of their work. Growth of new orders, introduction of new products and efficiency gains are expected to be the main factors supporting higher business revenues. The principal threats are deemed to be raw material price rises and increased competition.
Volumes of incoming new orders placed with Bric manufacturers are expected to increase strongly during 2008. A rise in new work is anticipated at 67% of firms, while fewer than 5% expect a decline. Positive trends in activity and revenues are forecast to result in improved business profitability over the next 12 months. About 57% of manufacturers foresee higher profits in 2008, compared with around 13% that expect a fall. Employment is also set to grow strongly, with about 38% of companies expecting to hire additional staff.