A FEW CLOUDS IN THE FORECAST
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(FORTUNE Magazine) – Manufacturers have turned a bit gloomy about the business outlook--higher energy costs get most of the blame. According to the latest survey of companies conducted by the National Association of Manufacturers and FORTUNE, only 86% of large companies (those employing more than 1,000 workers) were positive about their outlook in the second quarter, the lowest level in nearly two years. The manufacturing expansion remains on track but is expected to downshift in the year ahead, with both small and large firms anticipating a sales-growth slowdown. Likewise, the upturn in business investment that began two years ago will continue into 2006 but at a slower pace. As for the inflation rate in manufacturing, it will remain in check. Big firms see prices rising 1.6%; smaller firms expect a bump of 2.1%, very close to their average expectation of 2% in 2004. All in all, manufacturers, while generally still optimistic, are less bullish about the next four quarters than they were in 2004.