March automotive Supplier Sentiment Index declines

03/13/2014

When January 2014 kicked in, the Original Equipment Suppliers Association's (OESA) Supplier Sentiment Index remained unchanged, with the index remaining at 60. The 94 survey respondents were "somewhat more optimistic" - revealed by the uptick in this category. The best news was that no smaller companies (those with revenues of $150 million or less) indicated any pessimism.

The March Supplier Sentiment Index, however, declined to a level of 56. While the overall index remained positive, there was a "modest shift in opinions from 'somewhat more optimistic' to 'somewhat more pessimistic.'" This shift occurred in each supplier revenue group but was more prominent in companies having $150 million or less global automotive revenue. While supplier optimism stemmed from realized new business and improving economics in Europe, the pessimism came from global political unrest, increasing vehicle inventories and tapering new model programs, said the OESA's Barometer Summary.

Suppliers revealed a confidence in their ability to access raw materials in preventing or mitigation supply chain shortages, they weren't as confident when it came to understanding the financial viability of their sub-tier suppliers.

In January's Supplier Barometer Summary, the top three issues facing suppliers as they worked to meet production schedules were the ones that vexed them throughout 2013: skilled labor shortages, production overtime premiums and internal manufacturing capacity constraints. However, it should be noted that the number of suppliers having specified production issues, inbound expedited freight, outbound expedited freight and component shortages lessened in degree of concern in the January Barometer.
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