By Hillary Parker, CPA
Looking back at our 2018 Manufacturing Survey, businesses expressed optimism for several reasons, including the political focus on manufacturing, movement on tax reform, reduced regulations, and improvements to healthcare.
For our 2019 Manufacturing Survey, the outlook is still upbeat, with manufacturers expressing significant optimism for overcoming the following hurdles:
- Raw materials – costs are expected to increase, but only 14% of those surveyed expect a significant increase.
- Labor costs – similarly, this category is expected to increase, but only 10% expect that increase to be significant.
While lack of available talent was reported as the biggest barrier to growth, most of the respondents didn’t expect a substantial increase to the labor costs. As the unemployment rate remains low, labor costs may increase greater than the respondents initially expected.
Some respondents noted the tariffs implemented by the Trump Administration have driven up costs of raw materials. The increasing complexity of the global supply chain may have made it difficult for some companies to forecast the future impact.
Priorities for 2019 focus on growing sales, improving profitability, and addressing workforce shortage. Companies also recognize the need to keep up with cyber security and are planning significant investment to reduce risks and identify preparedness. However, continued spending on technology innovation will be crucial to future success.
The report finds that the challenge of gaining a competitive advantage remains critically important. The resilience and success manufacturers have created for themselves will help alleviate the major concerns for 2019.
For more Manufacturing Survey insights, contact Hillary Parker for a complimentary copy of our 2019 Manufacturing Survey.
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