For the second year, the Leading Edge Alliance (“LEA”), has conducted a Manufacturing Outlook and Insights survey with participants across the country. This year there was a 75% increase in participation. Overall, the survey resulted in a positive outlook for individual businesses, the industry as a whole, and the economy. There were several factors that contributed to the positivity: some of the factors were intrinsic, while others were from outside sources, such as the growing U.S. economy. Let’s take a look inside some of the survey results and dig deeper into the future of the manufacturing industry.
As a manufacturer, what would you say are your top priorities? According to participants, their priorities are growing sales, cutting costs, and addressing the talent gap. In order to grow sales, 72% of respondents expect that growth to be organic within domestic markets. While 44% expect growth through developing new products and services. Perhaps your company plans on both, or maybe you’re like the 20% who are considering acquisitions.
All things considered, cybersecurity is another big priority for manufacturers, with 75% prioritizing and investigating. You know what they say, it’s not if, but when you have an incident. And with most incidents stemming from inside organizations, make sure your employees are cognizant of what they click.
One good thing to come from the Tax Cuts and Jobs Act is the burden alleviation from companies. Twenty-five percent of respondents expect a moderate to significant decrease in taxes. Not sure where your organization stands? A tax professional, such as one at LGT can provide an analysis and help make things clear.
One predicament most companies struggle with is how to grow sales while cutting costs? According to the survey, beyond labor costs, operational spending increases will focus on increasing both sales and capacity.
There has been a reported talent shortage in the manufacturing industry as of late, and 50% of survey participants expect to increase their hiring. You want to hire more talent; that’s great, so does everyone else. How are you going to do that? How will you stand out among competitors? Respondents reported increasing compensation packages, conducting internal training and apprenticeships, and developing strategies to reduce turnover. Also, with a lot of baby boomers inching toward retirement, companies are becoming more deliberate about succession planning.
Generally speaking, manufacturers are optimistic about the future and their performance. They’re optimistic about the industry and economy as a whole, and rightly so, as the U.S. and global economies grow. While there is optimism, it isn’t without a few concerns:
With all of these changes, and more, it is pertinent to have a trusted industry advisor to walk you through them. We are confident that our firm, along with the other LEA firms are among the best.
If you would like to learn more about the survey results, or its respondents, please give us a call or visit our M&D page.
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