Business Optimism Sets an Eight-Year Mark

(FORTUNE Magazine) - A remarkable 91% of respondents from both large companies and smaller ones were optimistic about their business outlook in the fourth quarter of 2005, according to the latest quarterly survey conducted by the National Association of Manufacturers and FORTUNE. In the eight years we have been compiling the NAM/FORTUNE Manufacturing Index, that's the first time more than 90% of respondents in both categories have been upbeat. Large firms (those that employ more than 1,000 workers) expect their sales to rise by 5.5% over the coming year, the best outlook they've had in four quarters. Small and medium-sized firms expect their sales to rise by 4.7%, their best in three quarters. Moreover, both groups expect the prices of their products to increase by 2.4% in 2006. For large firms, that is the fastest pace of expected price increases we've ever measured. For smaller firms, pricing expectation nearly matches the previous high of 2.5% hit in the third quarter of 2005.

Bullish Thinking

Manufacturers with a positive outlook. Large companies Small and medium-sized companies 2004 Q3-Q4 2005 Q1-Q4