Manufacturers Grow, Remain Optimistic Despite Hiring Challenges
A strong majority of manufacturing companies expect 2015 to meet or beat 2014, and are optimistic about 2016 despite a persistent and troubling lack of qualified workers.
Despite ongoing staffing challenges, a survey of more than 750 U.S. manufacturing companies in over 25 different industries was overwhelmingly positive. Conducted by buying consortium Prime Advantage in July, the survey found:
- 80% of respondents expect to be at or above previous year’s revenues
- 83% percent anticipate maintaining or increasing revenue performance in 2016.
- 61% planned on hiring new employees in 2015
The last point, however, also touches on a potential hurdle for manufacturers: finding skilled workers. A lack of qualified workers remained the top threat to manufacturing growth among respondents for the second consecutive year, with 46% citing this concern, down slightly from 53% in 2014.
While having 80% of respondents think 2015 revenue will meet or beat 2014 is quite strong, that figure actually represented the lowest percentage of optimists in this category since 2010, and 27% of respondents were currently performing below forecast for 2015. Of those enjoying revenue growth, new product lines and new customers were credited for the growth.
Some other takeaways from the survey:
- Capital expenditures: 87% are either meeting or exceeding capital expenditure plans for 2015 and 73% expect current trends to continue throughout the remainder of the year
- Cost pressures: Raw materials top the list of leading cost pressures, with indirect materials and supplies, as well as component parts pricing, also reflecting significant margin-threatening factors for manufacturers
- Employment: Of the 61% of members that went into 2015 planning to add new employees, 79% have already fulfilled that mission. No respondents are expecting layoffs and 47% expect to hire on additional employees.