Buy a Manufacturing Business for Sale

Manufacturing Businesses – a Profitable Industry

March 4th, 2011

Jonathan Dionisio

Common sense tells you that one of the determining factors as to why your company would consider buying a business is industry stability. Early this year, I wrote an article on how the manufacturing industry has continuously shown better business stability than other industries, making these companies ideal acquisition candidates. (See Build a Better Future – Buy a Manufacturing Business for Sale). Since then, manufacturing businesses have continued to become more profitable and are nearly registering pre-recession digits.

In the latest index released by the Institute of Supply Management, the manufacturing sector expanded for the 19th consecutive month, and the overall economy grew for the 21st consecutive month. The PMI for February registered at 61.4 percent, a level last achieved in May 2004.

Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee, stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January and February (61.1 percent) corresponds to a 6.5 percent increase in real gross domestic product (GDP). In addition, if the PMI for February (61.4 percent) is annualized; it corresponds to a 6.6 percent increase in real GDP annually.”

According to Ore, new orders and production, driven by strength in exports in particular, continue to drive the composite index. “New orders are growing significantly faster than inventories, and the Customers’ Inventories Index indicates supply chain inventories will require continuing replenishment,” he added.

Of the 18 manufacturing industries, 14 are reporting growth in February, in the following order: Apparel, Leather & Allied Products; Petroleum & Coal Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Machinery; Chemical Products; Fabricated Metal Products; Computer & Electronic Products; Textile Mills; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Paper Products; Wood Products; and Miscellaneous Manufacturing.

Currently, Corporations4Sale represents several companies involved in these areas:

Manufacturing is one of the best and most stable industries your company can consider venturing into. As a company interested in acquisition, buying a manufacturing business is a considerable option for expansion. With its stability, high market value and good returns, your investments will surely be worthwhile.

Sources:
http://www.ism.ws/about/MediaRoom/NewsReleaseDetail.cfm?ItemNumber=21136
http://online.wsj.com/article/SB10001424052748704506004576174273942074528.html
http://www.reuters.com/article/2011/03/01/us-usa-economy-idUSTRE71R3OO20110301
http://money.cnn.com/2011/03/01/news/economy/ism/index.htm