Subscribe to our free, weekly email newsletter!


Manufacturing: Report shows executives pleased with global outlook, concerned with domestic policy

Two thirds expect to add jobs next year, even as more than half report skilled labor shortage.
By Josh Bond, Associate Editor
June 25, 2013

Results from a recent survey suggest that the industrial sector is generally optimistic about its growth prospects for the coming year, but sees an array of regulatory and policy-related issues as threats to its continued recovery.

These are among the findings from the 2013 McGladrey Manufacturing and Distribution Monitor, a survey of more than 1,000 middle market industry executives from across the United States. Conducted in March of 2013, this year’s survey found that 85% of respondents are optimistic about their businesses, 73% about their industry, 49% about the U.S. economy and 33% about the world economy. “It’s really indicative of the fact that companies feel pretty confident about the things they can control, but as it gets further away from them they get less and less certain,” said Steve Menaker, partner and Southeast manufacturing leader for McGladrey LLP.

That said, confidence in the world economy nearly doubled from just 17% last year, said Menaker. “People are feeling better about the European and world economies,” he said. “That creates opportunities for companies operating in the international market.”

While respondents were concerned about traditional business threats like materials pricing, far more respondents see regulatory and policy-driven pressures as the biggest threats to continued growth. About 74% of executives report they expect government regulations to limit or significantly limit growth in the next 12 months, followed by implementation of the Affordable Care Act (71%), increase in payroll taxes for Social Security and Medicare (69%), and the federal deficit (67%).

Nevertheless, according to the survey, manufacturers and distributors have high hopes for the next 12 months; 85% report optimism about their growth prospects over the next 12 months and 83% expect an increase in sales. Anticipated sales growth for the next 12 months is in the 7 or 8% range, said Menaker, who suggested the numbers are strong enough to bolster confidence. “That kind of growth might not get you excited back in the heyday, but there is now a lower level of expectation,” said Menaker. “They’re just looking to not go backwards. The numbers seem to support there is still optimism, but not strong optimism.”

The survey results depict an industry more concerned with the bottom line than the top line, Menaker noted. “We’ve seen companies that are focused on all sides of their business and managing the cost side.” This is reflected in the number of respondents who plan to lower costs through operational efficiencies (89%), by working with suppliers and customers (59%) and by investing in equipment (56%). A large number of respondents also plan to invest in process improvement initiatives (58%), and in new or upgraded information technologies (43%).

Whether businesses are thriving (32%), holding steady (61%) or declining (7%), many report the shortage of talented labor as a key concern. Although 63% expect to add an average of 4% to their workforce in the next 12 months, 57% of respondents expect the “skills shortage” to limit growth over the next year.

“There is no question that we have a challenge in finding that skilled employee,” said Menaker. The number one strategy companies are employing is developing their own in-house training and development programs (71%). Menaker said such programs are part of the top five best practices among thriving businesses:

1) Continuous improvement
2) International expansion and exporting
3) Committed program for training and productivity
4) Investing in information technology
5) Managing procurement in the supply chain

Click here for the complete report.

About the Author

image
Josh Bond
Associate Editor

Josh Bond is an associate editor to Modern. Josh was formerly Modern’s lift truck columnist and contributing editor, has a degree in Journalism from Keene State College and has studied business management at Franklin Pierce.


Subscribe to Modern Materials Handling magazine

Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Recent Entries

This complimentary white paper addresses areas of potential benefit to a grocery distributor considering an investment in automated case picking technology.

In 2015, a new era in shipment pricing will go into effect when major carriers implement dimensional ("dim") weight pricing for all ground packages regardless of their size. This complimentary white paper, "Dimensional Weight: Don't Let it Weigh You Down", can help you optimize your packaging operation to minimize the financial impacts of dimensional weight pricing.

Replacing older, less-efficient lift trucks at the right time can reduce your maintenance costs, improve your productivity and, most importantly, save money and maximize your return on investment. So how do you determine the right time to make a new, significant purchase? Download this complimentary white paper for guidance on how to determine the ideal time to replace lift trucks and how planned replacement can benefit your operation.

The prolonged operating hours of automated distribution operations leave limited time for maintenance. For tightly-scheduled fulfillment operations, unplanned downtime not only cuts into slim profit margins, it jeopardizes future business and customer loyalty. Download this complimentary white paper to learn five mission-critical benefits of implementing a resident maintenance program.

Debut of Pharma EXPO plays crucial role in increase.

Article Topics

News · Supply Chain · Economy · Distribution · McGladrey · All topics

About the Author

Josh Bond, Associate Editor
Josh Bond is an associate editor to Modern. Josh was formerly Modern’s lift truck columnist and contributing editor, has a degree in Journalism from Keene State College and has studied business management at Franklin Pierce. Contact Josh Bond


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA