Home | Business News | Browse by Publication | M | Metal Center News

Prospects a little bit better: service center executives appear slightly more optimistic about the coming year. (2003 Outlook Survey).

Article Excerpt
In 2001, it appeared the service center business couldn't get much worse. Then came 2002. But after suffering through two brutal years of the manufacturing recession, some service center executives are looking forward to 2003 with a slightly higher sense of optimism.

Seventy-six percent of respondents to the 2003 Metal Center News Outlook Survey characterized themselves as optimistic about the coming year, reversing a two-year decline in industry sentiment. Seventy-one percent of respondents called themselves optimists last year, vs. 82 percent in 2001 and 91 percent in 2000.

To gauge the degree of their optimism or pessimism, respondents were asked to rank their feelings on a scale from 1 to 6. Those indicating a 1, 2 or 3 fell on the pessimistic half of the scale; 4, 5 and 6 on the optimistic half. Averaging all the responses reveals an MCN Optimism Index of 4.3--up from 4.0 last year.

Pointing to another positive sign, 20 percent of respondents to the last survey admitted they would lose money in 2001; in the current survey, only 10 percent said they would not show a profit for 2002. While the actual percentage of unprofitable service centers in the market may well have been higher than both those figures, the trend points toward improving profitability.

In addition to profits, respondents' forecasts for demand, sales and capital spending also reflect a more positive outlook than in last year's survey (see Service Center Trends chart).

SALES AND PROFITABILITY

Respondents ranged from a small operation with four employees and just $230,000 in annual revenues all the way up to a 2,500-employee corporation with $1.7 billion in sales. But the typical (median) respondent reported sales of about $8 million from a workforce of 25, including five salespeople. The typical revenue per salesperson was $1.6 million (see Service Center Stats chart).

Two out of...

View this article FREE - Now for a Limited Time, try Goliath Business News
Free for 3 Days!