Confidence Solid as a BRIC, Says KPMG Report; EMERGING MARKETS MANUFACTURING

Article excerpt

Manufacturing firms in the BRIC region are highly confident over business prospects for 2008, a new business survey has concluded.

The 2008 KPMG Business Outlook Survey, which surveyed 1,800 manufacturing firms throughout the BRIC countries - Brazil, Russia, India and China - shows that 70 per cent of companies anticipate a rise in activity during the next 12 months. Just six per cent expect a decline.

Brazilian companies are the most optimistic, while positive sentiment was least marked amongst Chinese firms.

The survey covered firms in the food and drink, basic metals, mechanical engineering, textiles and clothing, vehicle manufacturing, chemicals and plastics, electrical and optical, timber and paper, and other manufacturing sectors.

New order volumes placed with BRIC manufacturers are expected to increase strongly during the year, with 67 per cent of firms surveyed predicting a rise in the amount of new work. Fewer than five per cent of firms expect a decline.

Growth of new orders is set to result in higher rates of capacity utilisation during 2008, with more than half the respondents anticipating an increase.

In preparation for the robust demand, firms in the region are set to boost their ratios of stocks of finished goods to output over the coming year. Inventory growth is predicted to be concentrated on the Indian and Brazilian manufacturing economies.

In contrast, Russian and Chinese companies expect little change in their inventories to output ratios.

Positive trends in activity and revenues are forecast to result in improved business profitability over the next year, with 57 per cent of manufacturers expecting higher profits in 2008. …