Cost reductions last year, growth now the focus

What a difference a year makes…last year at this time, business confidence in the economy was sitting in the depths of a bottomless pit. If findings are to be believed, confidence is up, if not gradually, as are inventory levels. According to Managing Automation’s Outlook poll, manufacturers in the U.S. and Europe have positive outlooks for the new year at 57% and 55% compared to 26% and 13% last year.

One significant difference is in the area of priorities. Last year, it was all about cost reduction. This year, the focus is on activities that spur growth such as product innovation, improving processes, new market penetration, and business agility. And with that, the focus is on technology investments in the areas of new computer systems, wireless communications products, and automation platforms.

Inventory levels across all sectors took a hit during 2009, but that will change in 2010. While inventory levels at wholesalers jumped 1.5% in November, you can expect the same with manufacturers who need to refill the pipeline. From growing confidence to rising inventories, the signs are there. More importantly, psychology plays a huge part in the health of the economy, so here’s hoping that confidence translates into sustained prospects.