A recent study from Prime Advantage, a Chicago-based buying consortium for small- and mid-sized industrial manufacturers, found that raw materials and energy costs top their list of cost pressure concerns for 2008. According to Prime Advantage, almost 100 respondents, including business owners, vice presidents of procurement, and purchasing directors, were polled for the report, titled “Group Outlook Survey.”

More than 46% of survey respondents agreed that raw materials — including stainless steel, nickel, copper and other metals, and plastic — were a major concern for 2008. Energy costs were the second chief concern, with 17.5%, followed by logistics and supply chain costs at 16.4%. Other concerns are noted in the Figure.

“More than rising energy costs or inflation, the uncertainty around pricing pressures for raw materials continues to be an obstacle to success for many small- and mid-sized manufacturers,” says Louise O'Sullivan, Prime Advantage president and founder.

In addition, the survey found that 66% of Prime Advantage members are planning significant improvements in 2008, including equipment upgrades. Another 11% say they intend to address IT systems improvements.