Indiana manufacturers, many of which have suffered major job losses, are optimistic the economy will rebound next year, according to an annual survey commissioned by Katz Sapper & Miller LLP.
The Indianapolis-based accounting firm's fourth Gear and Fulcrum report indicates that only 3 percent of respondents think the economy will worsen in 2010, compared with 30 percent that expected conditions to decline this year when they were surveyed a year ago.
What's more, 95 percent of companies surveyed anticipate steady or improved performance next year, echoing sentiments from economists that a recovery could be at hand.
"With all the recent challenges, the vast majority of companies look toward improvements in 2010," said Scott Brown, partner in charge of Katz Sapper's manufacturing and distribution practice. "Hopefully, that optimism is warranted."
Yet demand for workers within the manufacturing sector remains weak. Indiana factories have shed 108,000 jobs since the start of 2008, according to the Indiana Manufacturers Association.
The Katz Sapper report said the severe nature of the job cuts, most of which occurred on shop floors, could imply that companies will need to ramp up operations quickly if conditions get better.
But Brian Burton, vice president of the IMA, predicted employment growth likely will lag any rebound.
"I think there are signs of optimism out there, that we have hopefully hit the bottom and will start to see some recovery coming up in the next year," he said. "However, some of the long-range forecasts that we have seen show that unemployment rates will continue to increase through next year."
Indiana's seasonally adjusted unemployment rate in August, the most recent month for which state statistics are available, stood at 9.9 percent, 1 percentage point above the national jobless rate in September. Many economists predict the rate ultimately will top double digits.
Not surprisingly, the Katz Sapper study said that 65 percent of respondents reported that the recession has had a "significant negative impact" on sales.
