Survey: U.S. Manufacturers Optimistic Despite Challenges
U.S. manufacturers are cautiously optimistic, despite significant challenges, including inflation, the labor shortage, and continuing supply chain disruptions, according to a new survey.
The 2022 Marcum National Manufacturing Survey found that 95% of expect 2022 revenues to meet or exceed 2021, and only 5% anticipate a decline.
Sixty percent of those surveyed by the national accounting and advisory services firm shared positive feelings about the sector’s outlook for this year.
The report noted that “robust macroeconomic conditions drove good results across the manufacturing spectrum in 2021. These compelling growth figures came despite headwinds from labor and logistics, sourcing difficulties, and ongoing struggles with inflation.”
COVID-19 continues to impact the manufacturing sector, with more than two-thirds of respondents (68%) reporting that the pandemic permanently changed operations.
The survey also found increases over last year in how companies will manage logistics, total headcount, the use of technology, and supply chain management.
“It is encouraging to see that optimism among manufacturers remains high, although the 60% who expect higher revenues this year is down from 80% last year, when the pandemic was first showing signs of sunsetting,” said Marcum partner Jonathan Shoop.
Among the survey’s key findings:
- Replacing skilled workers lost during the Great Resignation was the biggest challenge for 83% of respondents, the largest concern of manufacturers.
- 77% plan to increase headcount in the next 12 months, with 86% raising wages, 66% expanding benefits, and more than half increasing bonuses last year.
- The top three priorities cited by manufacturers for the immediate future are increasing productivity, leveraging technology to drive innovation and improve quality, and expanding product and service offerings.
- Half of all respondents invested in new technology last year, and another 40% plan to do so this year.
- Supply chain disruptions were a top concern for 45% of respondents, up from 23% last year.
- 40% of respondents want diversify their supply chains, with 63% reporting shipping delays and a third unable to meet demand last year.
- To mitigate soaring inflation, 70% plan price increases this year, renegotiate with suppliers, and a focus more heavily on efficiency.
The report notes that to remain competitive in hiring and retaining employees, manufacturers must offer market-level—or better—wages and benefits.
“It is not surprising that more than 75% of respondents view their workforce as a critical to the success of their businesses, and that the ongoing tight labor market—especially for skilled workers—remains a major concern,” Shoop said.
“While most manufacturers are offering higher wages and looking to improve benefits, those approaches can be a zero-sum game.”
“More than 60% of respondents told us they plan to increase their workforce by at least 5% in the next year, and more than 80% expect to replace 15% or more of their workforce in the next four years.
“While most manufacturers are offering higher wages and looking to improve benefits, those approaches can be a zero-sum game if everyone is applying them.”
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