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Privately Held Manufacturing “State of the Union” Fairly Positive

February 25, 2013, 07:25 AM
Filed Under: Manufacturing

Preliminary estimates from Sageworks Inc., a financial information company, show that the “State of the Union” for private manufacturing companies is fairly positive.

On average, privately held manufacturers saw their sales increase nearly 9 percent – healthy gains but a slowdown from almost 15 percent growth in 2011, according to Sageworks’ data. Profit margins, meanwhile, continue to increase and have topped pre-recession levels. The average net profit margin for private manufacturing companies in Sageworks’ database was 6.5 percent, according to current estimates for 2012. In 2011, the average net profit margin was more than 5 percent in 2011, while a recessionary low of 2.7 percent was reached in 2009.

Sageworks analyst Brandt Leahy said it’s unclear whether the margin improvement is tied to increased demand or to cost cutting in the sector. As a whole, privately held U.S. companies in 2012 achieved higher per-employee sales and profits than in recent years, suggesting they are more efficient by those measures. For some manufacturers, however, uncertainty seems to have slowed business yet again in the last month or so. And that’s causing them to reconsider hiring new workers.

Sageworks possesses a proprietary database of privately held company financial statements aggregated by industry. Each day, approximately 1,000 of these financial statements are collected by Sageworks from accounting firms, banks, and credit unions through a cooperative data model with Sageworks clients. The data is segmented and can be queried by 1,200 industry codes, 70 financial metrics, company size, and geographic location.

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