Eight out of 10 U.S. manufacturers expect to grow sales this year, buoyed by their optimism about the strength of regional, national and global economies, according to the 2019 National Manufacturing Survey Report prepared by Leading Edge Alliance (LEA), a global association of 220 accounting and consulting firms.
"Across the board, manufacturers are optimistic about the regional economy, sector growth, and increasing revenue expectations in 2019," the report states. "Looking ahead, manufacturers expect raw materials, labor costs, lack of available talent and competition to be significant hurdles in 2019. The tariffs implemented by President Trump provide productivity issues; however, an increase in spending on Big Data and business intelligence are delivering innovative technology for minimizing productivity concerns."
More than 350 manufacturing executives participated in the survey, which includes respondents who produce industrial/machining; transportation/automotive; construction; food and beverage; and other products.
2019 Survey Highlights
- Growth: 81% of manufacturers expect their revenue to increase in 2019, and 61% expect their overall sector to expand in 2019.
- Economy: Optimism for the regional and national economies has increased by more than 12 percentage points over the last 2 years.
- Priorities: Manufacturers' top three priorities are growing sales, improving profitability and addressing the workforce shortage.
- Challenges: Most manufacturers (52%) cited labor/talent as their greatest barrier to growth, followed by competition (34%) and profitability (25%).
The survey identified three key growth strategies manufacturers will use to keep their companies on a growth track: Technology, mergers and acquisitions, and talent management.
- Technology: Manufacturers plan to leverage technology as key to solving productivity concerns; 76% said that they will investigate/prioritize cybersecurity in 2019, and 43% said they will prioritize Big Data/ERP/IoT.
- M&A: More manufacturers are considering a merger/sale or acquisition in 2019; 21% expect to acquire another business in 2019 and 16% are in the pre-planning stage of a merger or acquisition.
- Talent: Faced with a growing labor shortage, manufacturers have turned to a range of tools to improve hiring and retention with 62% increasing compensation, 39% implementing retention strategies and 35% using internal training programs.
"The challenge of gaining a competitive advantage remains critically important," the report says. "We believe the resilience and success our manufacturing clients have created for themselves will help alleviate the major concerns for 2019."