11 Key Takeaways from MNI's 2021 Survey of Manufacturers

As U.S. manufacturing companies forge ahead from the severe losses suffered at the height of COVID-19 plant closures in the spring of 2020, a dizzying number of factors continued to impact manufacturing operations in the United States. From continuing COVID-related labor supply issues to uncertainty over the future of tariffs to the rapid adoption of new technologies, it is a particularly challenging time for manufacturers.

Given so many new developments in the sector, we were curious to hear perspectives from manufacturing companies on outlook, new technology, COVID-19 impact, and more, MNI invited manufacturers across the U.S. to take part in an in-depth survey on business conditions and outlook. Today, we are pleased to share the results of the survey.

Pandemic Impact

We started out asking manufacturing companies how the COVID-19 pandemic was impacting their businesses. Not surprisingly, slightly more than half of U.S. manufacturers reported that COVID-19 had a negative impact on their business, at 55%. Of those reporting a negative impact, 48% reported a moderately severe impact, while 16% reported the impact to be very severe and another 16% reported an extremely severe impact.

Meanwhile, nearly a third of manufacturers (31.9%) reported no impact on their business, while another 12.7% reported the COVID-19 pandemic had a positive impact on their business.

Supply Chain Issues

As coronavirus swept the globe, supply chain disruptions became a major issue for manufacturers.

Reponses to our survey illuminated the scope of the problem, with 47.8% of manufacturers reporting supply chain disruptions due to COVID-19. For these manufacturers 40.4% reported that they sourced more supplies domestically due to COVID-19. Similarly, our industrial marketplace IndustryNet, saw a significant rise in sourcing activity in 2020, including a 102% increase in quote requests, a 27% increase in industrial category searches and a 42% increase in company listing views, when compared to 2019.

Related: What Industrial Buyers Are Searching for This Week

Demand

Amid the pandemic, 51% of manufacturers reported slowing domestic demand, and 37.8% reported increased demand. 5.4% reported no change in demand.

New Product Lines

In the early days of the pandemic, we saw numerous manufacturers step up to the plate to produce lifesaving equipment and supplies for health care workers and the general public. In a remarkable show of resilience, automotive companies pivoted to make ventilators, apparel companies made face masks and distilleries produced gallons of hand sanitized, while countless manufacturers developed new parts and components to support this ongoing effort.

In fact, 21% of manufacturers reported adding new product lines such as PPE in response to COVID-19. In response to our survey, many noted how their companies were contributing to the effort, from making masks and face shields to producing parts for CT scanners to building utility trailers for pharmacies to use.

Said one company in the chemicals and allied products sector, “We make industrial plastic baskets for the plating industry, which had a large increase at the beginning of Covid due to ventilator parts and lab equipment After the first 2 months we had quite a slowdown but have since picked back up and are now looking to hire at least one.”

And in New York, custom plastic injection molding company Chenango Valley Technologies reported “ We have made some masks for one of our customers and are working on others as a COVID project.”

Looking Ahead

Operations Outlook

We all know that coronavirus hit manufacturers hard, but when do businesses expect operations to return to normal? Reponses to this question underscored the scale of uncertainty that continues to plague many industrial companies. A third (33.3%) of U.S. manufacturers don’t expect their operations to return to normal for another 12 months or more. Another 29% felt it would take 6-12 months, while 16.6% expected it would only take 3-6 months. However, 20% of manufacturing companies remained unsure.

Outlook for Industrial Sourcing

Meanwhile, 62.1% of manufactures reported plans to source more domestic suppliers. This is up significantly from our 2019 survey, in which 49% of manufacturers reported plans to source more domestically.

Relocation

In 2021, U.S. manufacturers are deciding to stay put. Just 2.7% of manufacturers say they have plans to relocate, while 5.4% report they are considering relocation. This is compared to 2019, when 10% of manufacturers said they had plans to relocate and another 11.7% reported possible relocation.

Technology

In 2020, manufacturers scrambled to invest in new technologies when adapting to the challenges brought on by the pandemic. This trend continues into 2021, with 35.1% of manufacturers planning to invest in new technology in 2021, while 27% are considering new technology investments. These include AI/Machine learning, 3D printing, and robotics, which accounted for the majority of new technology investments, but manufacturers also listed FEA software, new CNC equipment and tools, and automation equipment as priorities.

Labor & Capital Investments

Despite the challenges brought on by the pandemic, 22.8% of manufacturers reported plans to expand or upgrade their facilities, while another 17.1% reported they were considering an upgrade or expansion of their facilities.

Adding to this trend, 32% of manufacturers reported they are looking to hire, while the majority at 61.76% are looking to keep staff levels the same. Just 5.8% are planning on layoffs this year. Manufacturing companies have been facing twin challenges of COVID-related labor shortages and a persistent skills gap, with employment one key metric of manufacturing growth that has struggled in the recovery period. In fact, the Labor Department reports that manufacturing job openings in the U.S. have hit a record high of 500,000. This is reflected in our survey responses also, with 41.1% of manufacturing companies reporting they are having trouble finding skilled workers. 11.7% reported they were open to using staffing agencies to help fill open positions.

Said one company in the plastics industry, “Concerned about current labor shortages and changes in government regulations.”

Production

Manufacturers are expecting to increase production in 2021, with 61.7% reporting plans to increase output, while 26.4% are planning on keeping production the same.

Optimism

Manufacturers remained generally optimistic about business conditions, with nearly half (46.6%) reporting they are somewhat optimistic, while another 20% reported being moderately optimistic. Meanwhile, 10% of manufacturers are very optimistic and 16.7% are not optimistic.

Said one manufacturer in the industrial machinery sector, “We have shifted our business model and are adapting to the changes. Being innovative in finding new industries that can use our products and continue to be of high quality.”

Find New Suppliers in 2021 With IndustryNet

At MNI, we’re always looking to help U.S. businesses thrive, providing tried-and-true industrial solutions since 1912. Powered by trusted MNI data, IndustryNet is an industrial marketplace that helps connect industrial buyers with 400,000 U.S. manufacturers.

Set up a free account, build a list of suppliers, send quote requests, download catalogs, contact companies directly, and more.

IndustryNet is also a direct path for U.S manufacturers to increase their visibility among domestic industrial procurers.

Want to empower your sales team with MNI data? Learn more about how an IndustrySelect subscription can help you find new customers and build your business in 2020.