The National Association of Manufacturers 4th Quarter 2017 survey has revealed renewed levels of optimism in the sector that have never been seen before. Over 94% of the respondents were positive with respect to their company’s outlook in 2018 while in 2016 this number was 64%. This is the highest level seen in the 20 years that the survey has been conducted.
The trickledown effect of the optimism has been increased capital investment, higher sales volume and a rise in hiring.
Respondents in the survey are re-prioritizing business challenges as one would expect. Over the past few years, the number one business challenge has been an “unfavorable business environment”. Now, the top two challenges for manufacturers are “attracting and training a quality workforce” and “rising healthcare/insurance costs”.
Regulatory red tape still exists and will continue to be a challenge and require more streamlining or elimination by the current administration.
Almost 80% of the respondents are unable to fill their open positions and have tried to address the skills gap in variety of ways. For example, getting more hours out of the existing workforce, improving internal training programs.
If manufacturers can combine this optimism with realistic cost containment, innovation and efficiencies then they will see an uptick in what have long been stagnant profit margins. For a more detailed look at the survey, please click here.
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