Continuing a trend from the spring, more than half of respondents to the recent 2011 summer McGladreyManufacturing & Distribution Monitorexpect to increase their workforces by an average of 7 percent, in spite of the fact that 60 percent are pessimistic about the U.S. economy, compared to 38 percent in the spring.

"The Monitor results are debunking the myth that manufacturers have achieved productivity gains by using more technology and equipment to hire fewer workers," saidKaren Kurek, national manufacturing leader for RSM McGladrey, one of the nation's leading accounting, tax and business consulting firms. "We found that companies investing in technology and equipment are more likely to say they plan to hire more workers and invest in their training.

"The survey reveals the highest perceived risk factor among industry leaders who responded to the survey is commodity prices...Eighty-eight percent of respondents are expecting an increase in raw materials costs, and a surprisingly large 85 percent say they plan to pass those increased costs on to customers through blanket price increases, selective price increases or surcharges of some sort, so clearly, that impact will be felt well beyond the manufacturing and distribution industry."

In addition to rising commodity prices and the state of the U.S. economy, the summer Monitor revealed a 64 percent increase of respondents perceiving high risk in federal government gridlock (23 percent in the summer versus 14 percent in the spring) and a 53 percent increase in those perceiving high risk related to the global economy (23 percent in the summer versus 15 percent in the spring).

Despite the rise in apprehension about economics, politics and general business conditions, manufacturing and distribution leaders see some rays of sunshine among the clouds:

• 76 percent of respondents report increased productivity over the past 12 months.
• Of those reporting an increase in productivity, over 60 percent say they plan to grow their workforces in the coming 12 months. Sectors more likely to be hiring include chemicals, oil and plastic.

"What we're seeing is that manufacturers and distributers have positive data in front of them, but they're not sure whether to believe their figures or the dismal news they hear every day," Kurek said. "We took things a step further this quarter and created a series of recommendations for companies, based on data and best practices from firms that report they are thriving and growing."