Manufacturing Executives Remain Optimistic in 2023
It is no secret that the manufacturing industry has long been a state of limbo. Over the last decade, the industry has worked hard to overcome perceptions of manufacturing as a “dirty” industry to attract a new generation of workers and bridge the skills gap. More recently, the industry continues to battle a variety of supply chain disruptions and now is dealing with a slowing economy and signs of recession.
With that said, it’s time for some good news. A Jan. 2023 blog from Forbes has some very good news from those in the industry. A new poll conducted by Forbes, Xometry and Zogby shows that despite a variety of warning signs, 95% of manufacturing executives are optimistic. The nationwide survey conducted in December 2022 included 150 manufacturing executives. From a birds-eye view, 60% remarked that they see a “bright future” for the industry and 35% said they are seeing “light at the end of the tunnel.” Only 5% answered that the industry is “still in darkness.”
Such a cause for optimism could seem surprising when you consider the growing range of stressors felt throughout the industry such as ongoing concerns about COVID-19, inflation, supply chain issues and fears of recession. Despite this, the executives surveyed said sales and earnings were better in 2022 than in 2021. Only 10% reported a dip in sales. There was even a slight lessening in the number of executives who see a recession as likely. A previous poll conducted by the same group in August saw 92% of executives believing a recession was likely. The December poll found 87% predicting a recession.
Year of Differentiation
One area where those surveyed were not in sync was in hiring and capital expenditures. Some of those surveyed plan for increases while others are considering cuts. There is also a difference in thought regarding hiring and spending. While the tech industry has seen its fair share of layoffs, the outlook is certainly brighter in manufacturing. 52% plan to hire in 2023 and 36% plan to remain at current staffing levels. Forbes hypothesized that based on this, 2023 could well be a year of differentiation.
What is certain is that with rising inflation, the majority of companies will be raising their prices. 89% of those surveyed will likely raise prices and 54% of those surveyed said they will “definitely or very likely” raise prices. This is consistent with the previous poll conducted in August. These price hikes will likely be between 5% and 15% with some looking at a higher 20% increase.
In other words, 2023 is shaping up to be yet another interesting year. The next 12 months have all of the markings of great potential for some while also offering a fair bit of challenge for others. Only time will tell.