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Beginning in the first quarter of 2011, MFG.com expanded its MFGWatch Quarterly Survey of North American Manufacturers to include manufacturers from Europe, the Middle East & Africa (EMEA). The survey was conducted from the MFG.com Paris office, and the third quarterly survey for that region was just completed.
Clearly, the economic travails in the EU are beginning to manifest themselves on the shopfloors of European manufacturers. Business conditions, optimism and investment projections among both buy-side and supplier manufacturers fell in Q3’11 and will likely decay throughout the remainder of the year as uncertainty sets in.
Here are results and highlights from the most recent survey of the EMEA manufacturing region:
European supply-side manufacturers continued to see a dramatic contraction of their businesses in Q3’11. Only 35% report business growth in the most recent MFGWatch survey, compared to 44% in Q2’11. Also, 34% of suppliers report their businesses have contracted, up from 18% in the previous quarter.
Conversely, buy-side manufacturers in Europe report the same souring business conditions as their supply-side counterparts. European sourcing manufacturers reporting growth in their businesses fell from 44% to 27% in Q3’11, while those indicating contraction rose from 16% to 30% over the same period.
The percentage of European product manufacturers reporting significant supply chain disruptions fell a staggering 16%, from 52% to 36% in Q3’11, likely due to cooling business and economic conditions in the EU.
Employment among European manufacturers has begun to reflect the weakening economic landscape, with both buy-side and supplier manufacturers hiring less and laying off more employees. Among supply-side manufacturers, 13% fewer added jobs while a notable 13% more shed jobs (20%, up from 3% in Q2’11).
While not as dramatic, sourcing & product manufacturers also saw employment dwindle – with 27% adding jobs (down from 31%) and 18% decreasing payroll (up from 9% in Q2’11).
While operating costs still remain near the top of the list of concerns to both buy-side and supplier manufacturers, both rising taxes and access to capital have emerged rapidly as the greatest concerns to the European manufacturing base.
EMEA Buy-Side Supply Chain Concerns Q3 2011
EMEA Supply-Side Supply Chain Concerns Q3 2011
Unlike their North American counterparts, European supply-side manufacturers show a much stronger inclination toward exporting to international markets. 32% of these manufacturers report they will look to increase exports to foreign markets, up from 23% in the previous quarter. Also, the percentage reporting they are not considering exporting fell from from 26% in Q2’11 to 19% in the latest survey.
And in the most telling results that point to the worsening European economic conditions, both buy-side and supplier manufacturers state they will neither invest in technology or hiring in the coming months. Among sourcing manufacturers, 39% say they will make no investments (up from 31% in the previous quarter), while 37% of supplier manufacturers state they will make no investments (up from 25% in Q2’11).
EMEA Projected Buy-Side Manufacturing Investments Q3 2011
EMEA Projected Supply-Side Manufacturing Investments Q3 2011