Manufacturers head into 2018 optimistic about their industry, according to a national survey from EKS&H.
National optimism increased 18.1 percent year-over-year, while regional optimism grew by 11.1 percent and globally it grew 13.7 percent.
In fact, about 62 percent of manufacturers surveyed expect their sectors to grow.
“One thing that leads off the top is the remarkable optimism,” Chris Otto, a partner with EKS&H and leader of the manufacturing niche for that firm, told BizWest.
In fact, one indicator of that optimism is the growth in response the survey got this year compared to last year. It’s the second time EKS&H has done this survey and there were more than 450 participants.
There are three main areas of priority for manufacturers: growing sales, cutting costs and addressing the talent gap, an area of focus Northern Colorado manufacturers have also expressed.
Growing Sales: About 81 percent of participants said they expect revenue increases, 64 percent will spend 1 to 10 percent of revenue on research and development and 20 percent are considering mergers as an option.
Cutting Costs: About 25 percent of participants said they expect a moderate to significant decrease in taxes but just 2 to 3 percent said they expect raw material, technology and labor costs to decrease.
Talent: Half of the participants said they expect to increase hiring despite the top barrier to growth being a labor shortage. The most important strategies for attracting and retaining talent are listed as increasing compensation packages, conducting internal training and apprenticeships, developing strategies to reduce turnover and being more deliberate about succession planning.
“The talent pool is a priority people feel good about,” Otto said, “although some are apprehensive about ‘can we continue this and get the folks we need?’”
Otto said the talent question is something every organization should sit down and actively look at, especially the strategies they’re using to train employees differently, to attract and retain talent.
Programs like what Colorado has, to get high school students into manufacturing and promoting that as a track for success without needing to go to college, could be a viable solution to the talent gap.
“All things help in manufacturing if we’re open to thinking about things differently,” Otto said. “Maybe this is the opportunity to do it.”
As for the overall growth in optimism, given the diverse industry segment that responded to the survey — brewers to makers of heart equipment to robotics manufacturers — the optimism could stem from a variety of things, such as the political landscape, the weak dollar, the opportunity of international or different regional markets.
“Maybe there are folks that are very positive about the political climate,” Otto said. “Some people are excited about the innovation they’ve seen in the industry. And it cuts both ways: maybe they feel like they’ve brought in new talent to maximize that innovation.”
Original article published: https://bizwest.com/2018/01/05/survey-manufacturers-optimistic-2018-will-bring/