According to R.W. Bari’s Industrial Review both quotation and order activity improved in 4Q 2016. This was buoyed by a consistently better business sentiment as election uncertainty faded and Trump optimism soared.
With 94% of the quarterly Baird survey respondents predicting positive growth for 2017, the level of optimism is at historic levels and mirrors a newfound investor confidence, which is expecting a resurgence of growth under Trump’s pro-business presidency. Along with the positive mindset of the survey respondents, it would be remissive not to note the cost of raw materials, such as copper, nickel and iron, all have increased more than 20% since the fall of 2016. Steel is settling in, showing more than 10% increases in the same time period. Manufacturers will be looking to recover these material costs as a percent of sales. Price increases already have hit the market and are beginning to take hold. The quick rise in raw materials necessitated an immediate strong reaction to offset the additional production costs.