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Some Manufacturers May Have Escaped the Wrath of the Economic Downturn
One in four manufacturing companies says business has seen no impact at all following recession, but skilled labor shortage seen threatening long-term prospects - ATS survey
The Manufacturers Alliance/MAPI Economist Donald A. Norman compares the Great Recession to the Great Depression in this video posted by MAPImedia on January 16, 2009.
Peoria, IL — January 27, 2010 — Following recent reports that the economic downturn is continuing to linger as expansion of the gross domestic product slows, a new survey shows that 25 percent of U.S. manufacturers say they have seen no impact at all on their business due to the recession.
The survey of 150 manufacturers, commissioned by Advanced Technology Services (ATS) with Frost & Sullivan, suggests that large manufacturers seem to have weathered the storm the best, with 29 percent of companies with more than 1,000 employees reporting no impact at all. The report indicated that only 19 percent of companies surveyed said the economic downturn has had a "great" impact or "very great" impact on their business.
"This recession was a reality check for many businesses," said Jeff Owens, president of ATS. "I think those that reported seeing little or no impact were certainly in the minority. Many of our customers began drawing down their inventories early on in an attempt to circumvent getting hit hard, [and] that may have spared some of them. Others saw the early indictors and decided to focus their resources on core competencies and leave the rest to outsourced providers like us."
Larger companies (those with 1,000 or more workers) reported the least impact due to the recession, whereas midsize organizations reported seeing the greatest impact, saying that the economy has resulted in layoffs of full-time workers.
The aftermath of the recession has left many manufacturers wondering what the repercussions will be on the skilled labor shortage. According to the survey, respondents reported the lack of skilled labor is expected to cost their organizations on average $11 million dollars over the next five years. The cost reported is highest for larger companies and is estimated at $17 million dollars. The majority of respondents indicated they would fill positions with full-time workers when the economy recovers; however, close to a third said they would also fill positions through outsourcing with contract/flexible workforce.
"While some manufacturers reacted to the economic swings by cutting back or even eliminating in-house apprenticeship and training programs, vendors that handle IT, maintenance or repair were ramping up such programs," said Owens. "While manufacturers have implemented layoffs and early-retirement programs, vendors have cherry-picked those available workers."
Not everyone appears to agree that there will be a skilled labor shortage. In fact, only a quarter of respondents expect to be affected by a lack of skilled labor, with the greatest impact among midsize and larger organizations. One-third say the availability of skilled workers will not change, while 38 percent expect a surplus supply of skilled workers.
The survey of 150 manufacturers, commissioned by Advanced Technology Services (ATS) with Frost & Sullivan, suggests that large manufacturers seem to have weathered the storm the best, with 29 percent of companies with more than 1,000 employees reporting no impact at all. The report indicated that only 19 percent of companies surveyed said the economic downturn has had a "great" impact or "very great" impact on their business.
"This recession was a reality check for many businesses," said Jeff Owens, president of ATS. "I think those that reported seeing little or no impact were certainly in the minority. Many of our customers began drawing down their inventories early on in an attempt to circumvent getting hit hard, [and] that may have spared some of them. Others saw the early indictors and decided to focus their resources on core competencies and leave the rest to outsourced providers like us."
Larger companies (those with 1,000 or more workers) reported the least impact due to the recession, whereas midsize organizations reported seeing the greatest impact, saying that the economy has resulted in layoffs of full-time workers.
The aftermath of the recession has left many manufacturers wondering what the repercussions will be on the skilled labor shortage. According to the survey, respondents reported the lack of skilled labor is expected to cost their organizations on average $11 million dollars over the next five years. The cost reported is highest for larger companies and is estimated at $17 million dollars. The majority of respondents indicated they would fill positions with full-time workers when the economy recovers; however, close to a third said they would also fill positions through outsourcing with contract/flexible workforce.
"While some manufacturers reacted to the economic swings by cutting back or even eliminating in-house apprenticeship and training programs, vendors that handle IT, maintenance or repair were ramping up such programs," said Owens. "While manufacturers have implemented layoffs and early-retirement programs, vendors have cherry-picked those available workers."
Not everyone appears to agree that there will be a skilled labor shortage. In fact, only a quarter of respondents expect to be affected by a lack of skilled labor, with the greatest impact among midsize and larger organizations. One-third say the availability of skilled workers will not change, while 38 percent expect a surplus supply of skilled workers.
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