US: auto suppliers forecast positive results on strength of automakers image

With the North American light-vehicle production output expected to remain on a growing pat this year, the latest survey among automotive supplier shows they are upbeat about their financial prospects in 2015.

According to the latest research report, conducted in January by the Original Equipment Suppliers Association and implicating 85 suppliers, around 46 percent said their business outlook over the next year is more optimistic than it was last November. Forty-nine percent remained level with their forecast and only 5 percent saw a downturn. Suppliers’ manufacturing capacity looks ready to cope with automakers’ production plans, though most of the typical respondents said production estimates put the next 12 months at 85 percent of total capacity, a little below the May 2014 figure of 90 percent. On the other hand, production issues seem largely resolved, with just 27 percent worried about manufacturing bottlenecks – a sharp drop from 2014’s figure, when 53 percent were concerned.

The industry’s traditional worry about engineering shortage remained at the top of the issues. “The lack of engineering talent and skilled labor shortages continue to be top-of-mind,” the survey commented, with 69 percent of respondents expecting a shortage of skilled engineering personnel during the year. Another 33 percent were worried they might have possible component shortage periods during the 12 months ahead, while some of the companies also said – without being asked – they opted to raise wages to retain the skilled personnel. The US auto market has come off a strong performance in 2014, with light-vehicle sales at 16.5 million units – and the forecasts for 2015 put the delivery figure in the ballpark of 16.7 to 17 million vehicles.

Via Automotive News