The manufacturing sector is one of the most vital and dynamic industries in the U.S. economy--one that continues to face abundant challenges and uncertainties in the wake of the COVID-19 pandemic, technological disruption and global competition. To understand how manufacturers are coping with these issues and preparing for the future, Wipfli LLP, a top 20 advisory and accounting firm, conducted a survey of more than 330 directors and C-level executives within the industry. The results are published in the 2024 State of Manufacturing report, which provides insights into the current state and outlook of the sector.
• Manufacturers are confident about their revenue and market prospects: Despite the setbacks and difficulties caused by the pandemic, manufacturers have shown remarkable resilience and adaptability. According to the survey, 88% of respondents anticipate increased revenue for 2024, and most of them are targeting new customers and existing markets to achieve their growth goals. This reflects their optimism and confidence in rebounding from the crisis and seizing emerging opportunities.
• Manufacturers are struggling with employee retention and attraction: One of the biggest challenges facing manufacturers is finding and keeping qualified and skilled workers. The survey reveals that employee retention is the top concern for 63% of respondents, followed by employee attraction at 51%. To address this issue, manufacturers are offering higher pay, better benefits and other perks to retain and attract talent. However, this also increases their labor costs and affects their profitability.
• Manufacturing companies are investing in cybersecurity and digital transformation: Another major challenge for manufacturers is ensuring the security and integrity of their data and systems.
The survey shows that 35% of respondents had three or more incidents of unauthorized access to data in the previous 12 months, which could result in financial losses, reputational damage and legal liabilities. To prevent and mitigate these risks, 70% of respondents increased their investment in cybersecurity measures.
Moreover, 99% of respondents prioritize digital advancement, and 71% of them plan to increase their investment in Industry 4.0 technologies such as robotics, automation and artificial intelligence. These technologies can enhance their efficiency, quality and innovation, as well as create new business models and value propositions.
• Decision makers in manufacturing are facing supply chain disruptions and inflationary pressures: The survey also reveals that manufacturers are dealing with the impacts of supply chain disruptions and rising costs due to inflation. These factors affect their ability to meet customer demand, maintain inventory levels and control expenses.
The survey indicates that supply chain challenges and inflation are among the highest macroeconomic concerns for manufacturers, along with the threat of a recession.
To overcome these challenges, manufacturers need to adopt more agile and resilient supply chain strategies, such as diversifying their sources, increasing their visibility and collaborating with their partners.
The 2024 State of Manufacturing report is based on the responses of more than 330 manufacturers across the country, representing 32 states and various subsectors.
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