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As Manufacturers Shutter Their Doors, Appraisals Become That Much More Important

September 8, 2010

It may come as a surprise to many people that manufacturing is still the largest industry contributing to the United States gross domestic product. According to government numbers, manufacturing employs approximately 16.7 million workers, meaning that it is still an industry that needs attention. The size of industrial production and significance in the U.S. economy, coupled with the industry’s stagnancy and declining growth, presents a conundrum for companies in these industries and lenders in this sector.

Despite its large footprint in the economy, manufacturing has been in decline for many years due to cheaper alternatives in foreign markets. Competitive pressures from outside the U.S. will force manufacturers either to develop greater production and financial efficiencies or shut down operations. Investment and lending in this area will likely remain weak.

As manufacturing companies downsize or close their doors, lenders operating in this area will need to recoup some of their existing investments, including selling off machinery and equipment. The wisest course of action in this scenario is to hire a certified machinery and equipment appraiser (CMEA) to determine the value of the company’s machinery and equipment. This will ensure that the company that’s tightening its belt or throwing in the towel will realize the greatest profit when selling off its equipment.

By: NEBB Institute

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