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Overall findings from the Manufacturing Monitor results
Overall, the outlook for the manufacturing industry is largely positive, according to the 2017 RSM Manufacturing Monitor. Rising revenues and profits are fueling enthusiasm and driving investments in information technology, equipment, research and development, and training. In addition, industry hiring is on the rise, and production is seeing slow but steady gains.
Indices such as the Institute for Supply Management’s Manufacturing Purchasing Managers’ Index (PMI) and the J.P. Morgan Global Manufacturing PMI offer positive assessments of manufacturing in the United States and around the world. At the same time, however, the markets for some sectors have softened, leading to lower revenues and decreased client retention.
When making their strategic decisions, manufacturers will need a broad understanding of the issues at stake, which include the following:
- Growth: Overall, the global manufacturing industry appears strong, and some manufacturing sectors have fared quite well. With some growth in other worldwide markets, overall activity is increasing and having a positive impact on U.S. activities. Many manufacturers are offering new or improved products and expanding into other markets as strategies for growth, but mergers and acquisitions appear to be active as well.
- Technology: While two-thirds of manufacturers in the survey plan to increase their investments in technology, many executives perceive an insufficient return for efforts in internet of things technology. Data security is an ever-present concern, but efforts to address it appear to be limited, which has been the trend over the past few years.
- Profitability: Nearly half of manufacturers are reporting operating profits of 6 percent or more (before interest and taxes), but the costs of components and materials have increased in the past 12 months and manufacturers plan on passing these higher costs on to customers in a price-conscious environment. Investments in process improvements by almost half of the respondents continue to be a priority.
- Risk: Downturns in the global economy and fluctuations in currency and commodity pricing were of concern for a greater percentage of manufacturers than local or national domestic regulations. As the labor market tightens, attracting and retaining skilled workers continues to be an issue.
The perspectives of senior decision-makers offered in this report can help manufacturers compare their middle market organizations to industry peers across the country and around the world. The insights provided by RSM subject matter specialists will enable executives to make informed strategic and tactical decisions based on extensive, detailed data provided by the survey.