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GE Capital Releases Automotive Industry Economic Outlook

December 16, 2014, 06:58 AM
Filed Under: Automotive

GE Capital has released a national survey of C-suite executives at middle market companies (ranging from $10 million -

Key Findings - The most significant insights to emerge from GE Capital’s survey of leaders of U.S. middle market firms include:

  • The automotive sector of the middle market continues to thrive as the broader economy slowly recovers. The proportion of firms reporting year-over-year increases in revenue and employment is higher now than in March of this year.
  • Employment in the sector is expected to pick up in the coming year with nearly half of firms expecting to add head count.
  • Innovation is a key factor in the automotive industry with most firms deriving a significant amount of revenue from recently introduced products. There is evidence the importance of innovation in the industry will persist.
  • An increasing cost structure has made it difficult for automotive firms to maintain margins, and many feel margins may stagnate over the coming year.

Year-over-year improvements in company performance continue to be extremely positive in the automotive industry. Revenue and employment comparisons to one year ago are even more positive now than they were in March of this year.

  • Improved overall performance: 67% (compared to 68% in March 2014)
  • Improved financial performance: 79% (compared to 62% in March 2014)
  • Increased employment: 48% (compared to 41% in March 2014)

Optimism in the automotive industry is driven by an expectation of industry expansion and increases in the new order pipeline. As a result, firms are investing in their future.47% believe the sector will expand in the year ahead.

  •  60% expect the automotive industry to expand in the coming year
  • 44% say the new order pipeline has increased since last year
  • Capital expenditures are greater this year than last year at 61% of firms

GE Capital surveyed 60 companies in the automotive industry to ascertain their views on the global and U.S. economies and their outlook on a variety of important economic, industry and business-level issues, including growth expectations and financing needs. The decision-makers who were surveyed represent middle-market companies with revenue ranging from $10 million to $1 billion.
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