Nearly 58% of manufacturers rated their optimism about business prospects over the next six months at a seven or higher on a scale of 1-10. At the same time last year, more than 80% of manufacturers rated their optimism at a seven or higher. And just three months ago, nearly 70% of manufacturers rated their optimism at a seven or higher.
What’s more is, nearly one-quarter (22%) of manufacturers cited inflation and economic decline for the decline in optimism, and 100% of respondents said they have experienced an increase in material cost in the last 12 months, according to a Sikich study.
“Given current economic trends, it’s understandable that manufacturers’ optimism is declining,” says Jerry Murphy, partner-in-charge of manufacturing and distribution services at Sikich. “Yet, increased demand offers some promising news. To keep up, business leaders should diversify their material suppliers and challenge logistics providers to find ways to tighten delivery times. And, to address employee shortages, companies must revisit their talent strategies and implement comprehensive recruitment and talent development programs.”
From PR Newswire:
- All but 1% made the decision to pass price increases on to customers.
- Half of companies with revenue under $100 million are unable to keep up with their current demand, and 70% of respondents from companies with more than $100 million in revenue said they are unable to keep up with demand.
- Talent acquisition was the third most common reason manufacturers cited for their decreased optimism.
“Just as manufacturers are struggling with inflation, so are the individuals companies are trying to hire,” says Laura Fischer, managing director on Sikich’s human capital management and payroll consulting team. “A sign-on bonus can be a useful tool for companies with hiring challenges amid the labor shortage. For example, it can help a manufacturer attract more job applicants to a role that requires high-demand skillsets. Though, in addition to implementing a sign-on bonus, manufacturers competing for talent must also prioritize their recruitment strategy, training programs and workplace culture to attract and retain top talent.”
