The Manufacturing Industry has Reason to be Optimistic in the New Year
The manufacturing industry is kicking off the New Year with cautious optimism. The GDP is expected to remain within the 2 to 3 percent range with a 2.5 percent increase in 2019 and 2.6 percent industry growth. 2019 is also the ninth year of economic expansion, the second longest in U.S. history, according to William Strauss, senior economist and economic adviser for the Federal Reserve Bank of Chicago.
The pace predicted for the manufacturing industry in 2019 is somewhat faster than that of other segments in the general economy with sales and revenue expected to grow. Part of this increase can be attributed to the health of the industry and an improving competitive position for the U.S. in the global manufacturing market, according to FABTECH, an exhibiting company that showcases what’s new in metal forming, welding, finishing and fabricating.
Not surprisingly, the industry’s top priorities haven’t deviated much from those of the past five years. Industry leaders, tasked with orders from boards and shareholders, will continue to look for ways to grow sales, cut costs and address talent gaps. What is new is a greater emphasis on the use of digital technologies to improve business and a changing focus on teaming artificial intelligence (AI) and the human element of business. Leaders surveyed in KPMG’s 8th edition of the Global Manufacturing Outlook report stressed the importance of looking at AI as a partnership with human intelligence. The blend of AI and the human element will put an increased focus on the need for extensive retraining and educating workers on new roles.
Impact of AI on Workforce
64% say it will create more jobs than it eliminates
36% say it will eliminate more jobs than it creates
Such an approach will require new partnerships that extend inside and outside the industry. Manufacturers will need to continue to look for ways to build up a pipeline for new workers. This will be necessary as more Baby Boomers retire from the industry, leaving an information drain that could be difficult to replace.
Companies will also need to build and maintain strong supply chain partnerships on more than a handshake and prior contracts. KPMG stressed that with the threat of cyber security it will be more important for a business to know who they are considering a partnership with. The safety of a company’s data will only be as secure as those connected to the data throughout the supply chain. This includes the use of intrusion detection and a firewall to protect the perimeter from outside attack, secure communications through a VPN or SSL, increased securing measures using intrusion-detection software and network elements and upgraded monitoring systems.
Other Possible Obstacles to Growth
More stringent immigration policies
Tariffs impacting trade protectionism
Rising borrowing costs
By applying a mindset of digital and embracing the human element of business, the manufacturing industry can continue to adapt to customer needs in a changing competitor landscape.
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