Moderate revenue growth expected for manufacturing in 2013
U.S. industrial manufacturing executives remain confident about their ability to guide their companies through global and domestic challenges, according to the Q3 2013 Manufacturing Barometer, released by PwC US.
Although optimism regarding the global economic outlook reached 40%, the highest level since the first quarter of 2012, 82% of manufacturers surveyed expect positive revenue growth for their own companies in the next 12 months. Bobby Bono U.S. industrial manufacturing leader for PwC, says the numbers reflect a healthy level of optimism in the domestic economy. “It’s interesting that, despite what they see in the news, they are confident they can navigate their company through the economic, regulatory and legislative challenges,” said Bono. “They understand how their companies work and what they can do to succeed.”
The projected average revenue growth rate over the next 12 months remained moderate at 4.2%. Only 7% of respondents forecast double-digit growth, while 75% expect single digit growth. The primary growth driver remains the U.S. economy, with 60% expressing optimism about the domestic outlook. “But it’s not that the remaining 40% are pessimistic,” Bono said. “They are uncertain. Legislative and and regulatory pressures in general create uncertainty, both in the demand arena and the cost environment. I wonder if, for many of these executives, a bad result would be better than this uncertainty. At least with a bad result you know the rules you’re working with.”
The report also showed that hiring plans are on the rise, with expectations reaching the highest level in five years and the second highest quarterly percentage in the past 10 years. The majority (58%) plan to add employees to their workforce over the next 12 months, up 16 points from second quarter 2013 estimates.
But despite healthy hiring expectations, the survey identified headwinds in securing qualified workers. Three-fourths (77%) of respondents cited a need to fill certain skill gaps over the next 12-24 months, with only 23% claiming to have all the right skills needed at present. The biggest skill gaps were in middle management (70%) and skilled labor (67%). At the same time, half of U.S. industrial product organizations admitted to having open positions that they were unable to fill with skilled employees.
“Again, this is a product of uncertainty and caution,” Bono said. “If an employer looks for 10 things in an employee, maybe they used to be comfortable hiring someone with five of those. Now they’re looking for nine. You’re also seeing an evolution in the skills needed in these jobs with the growth in automation and technology. How do you find these workers? What are the appropriate salary ranges? Companies have to rethink how they acquire talent.”
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