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Special Questions
October 2009
| |
|
Oct. '08
percent |
|
June '09
percent |
Oct. '09
percent |
| 1. |
Has the availability of credit affected the outlook or operations of your firm? |
| |
Yes |
41.8 |
|
36.1 |
|
36.6 |
|
| |
No |
58.2 |
|
63.9 |
|
63.4 |
|
| |
|
|
|
|
|
|
|
| 2. |
Have you changed actual or planned capital spending in response to recent financial market developments? |
| |
Actual |
|
|
|
|
| |
Increase capital spending |
2.6 |
|
7.5 |
|
10.0 |
|
| |
Decrease capital spending |
36.8 |
|
48.8 |
|
46.3 |
|
| |
No change |
60.5 |
|
43.8 |
|
43.8 |
|
| |
Planned |
|
|
|
|
| |
Increase capital spending |
4.1 |
|
10.3 |
|
10.1 |
|
| |
Decrease capital spending |
39.2 |
|
46.2 |
|
43.0 |
|
| |
No change |
56.8 |
|
43.6 |
|
46.8 |
|
| |
|
|
|
|
|
|
|
| 3. |
Have you changed hiring or hiring plans in response to recent financial market developments? |
| |
Actual |
|
|
|
|
| |
Increased Hiring |
5.0 |
|
3.6 |
|
6.2 |
|
| |
Reduced Hiring |
13.8 |
|
19.3 |
|
16.0 |
|
| |
Cutting Jobs |
25.0 |
|
44.6 |
|
40.7 |
|
| |
No change |
56.3 |
|
32.5 |
|
37.0 |
|
| |
Planned |
|
|
|
|
| |
Increased Hiring |
7.0 |
|
8.3 |
|
5.0 |
|
| |
Reduced Hiring |
22.5 |
|
26.4 |
|
15.0 |
|
| |
Cutting Jobs |
19.7 |
|
25.0 |
|
27.5 |
|
| |
No change |
50.7 |
|
40.3 |
|
52.5 |
|
| |
|
|
|
|
|
|
|
| 4. |
Have recent financial market conditions affected your firms ability to obtain credit? |
| |
Yes - significantly |
3.8 |
|
2.4 |
|
7.3 |
|
| |
Yes - somewhat |
18.8 |
|
26.5 |
|
26.8 |
|
| |
No |
43.7 |
|
34.9 |
|
37.8 |
|
| |
N/A - Haven't sought credit |
33.7 |
|
36.1 |
|
28.0 |
|
| |
|
|
|
|
|
|
|
| 5. |
If yes to the previous question, did you experience: |
| |
A change in terms |
|
|
|
|
| |
Yes |
83.3 |
|
91.3 |
|
89.3 |
|
| |
No |
16.7 |
|
8.7 |
|
10.7 |
|
| |
A change in quantity |
|
|
|
|
| |
Yes |
60.0 |
|
75.0 |
|
78.3 |
|
| |
No |
40.0 |
|
25.0 |
|
21.7 |
|
|
| Survey collection period: 09/29/2009–10/02/2009. |
Special Question Comments
These comments have been edited for publication.
Beverage and Tobacco Product Manufacturing
We have been able to refinance our warehouse at better terms, increase our credit line and borrow additional money for new equipment. Due to the slowdown, we have gotten better prices on new equipment than we would have a year ago. The increase in efficiency due to the new equipment should lead to a smaller, more efficient workforce.
Chemical Manufacturing
Credit markets have not affected us other than a lack of confidence going forward. It's hard to commit to capital spending with no confidence in the future. We are finishing all capital work and are trimming expenses. We also expect speculation will increase energy prices going forward, which is detrimental to our business.
Plastics and Rubber Products Manufacturing
Affecting our business most is our customers' customers’ inability to obtain credit.
Nonmetallic Mineral Product Manufacturing
We are continuing to right-size in the current economic environment and adjusting to seasonal factors. Our expectation is for a slow recovery beginning in 2010 with the recovery time frame being three years in duration.
Fabricated Metal Product Manufacturing
Generally, the tight domestic credit markets have hurt our ability to sell product as most of our distributors are rapidly paring down inventories in order to generate cash—possibly in response to tighter lending standards. Internationally, the credit markets seem to have improved a little since last fall when many of our customers were not able to obtain credit or we were not able to obtain credit insurance on these customers. Internationally, conditions appear to be improving.
Cutting jobs has been accomplished through attrition. We had already invested in new sales sites and will follow through with those. However, we have no plans for additional expansion until the future (next 3–5 years) becomes much clearer than it is now. Fortunately we were not dependent upon credit.
We have not had a problem getting credit but our customers have, and that has reduced their orders to us.
Machinery Manufacturing
We certainly have reduced marketing expense and some other variable costs to get our budgets in line with the shortfall in revenue due to the slowdown. Demand is very soft in the high-end appliance industry, and we expect it will stay this way for another eight to 12 months.
Credit availability has not hampered activities significantly, but has reduced sales by a small amount due to reduced availability of credit to our customers.
We believe that additional bank credit is available to our company if we needed it, but it would be at a higher cost (about 300 basis points more) than our current credit facility. Our actions to reduce capital spending and reduce staff reflect poor demand for our services due to the global recession and its impact on our customers. Despite positive comments about the recovery in the economy, we do not see it yet in our markets. The economic conditions (demand and profit margins) of our major customer industries remain at historic lows. While it has not gotten worse over the past six months, we also haven't seen any improvement yet, either.
Computer and Electronic Product Manufacturing
We are much more aggressively cutting jobs and hours to try to break even. The concern is that any indication of operating losses will precipitate a significant tightening of credit.
Transportation Equipment Manufacturing
We rely on wholesale floorplan financing to finance our customers' inventory, and the credit markets are making it more difficult for our customers to access credit.
Furniture and Related Product Manufacturing
The total lack of credit has affected us severely. We were denied additional credit. The bank did not reduce our line of credit in place, but increased the collateral required to keep the line. We have had to reduce the amount of credit to our customers and have lost business as a result.
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