The manufacturing industry has weathered a challenging string of years, from the 2008 economic downturn through the recession.
Some shops closed their doors after decades in business. Some merged with larger companies out of necessity, losing the freedom and autonomy that set their businesses apart. Others laid off tens, hundreds or thousands of employees whose financial security and long-term planning fell into peril. Whether companies reduced their scale, limited their services or did away with old apprenticeship programs, the period of austerity took a toll on the optimism of manufacturing executives and their employees.
Assessing the state of the industry, statistics speak volumes. After all, the manufacturing industry is driven by quantifiable measures of success or failure. Did our output improve over the last quarter? Did we hire new employees? Do we have the capital to open a new location, or to invest in an important new piece of machinery? These measures give a very objective view of progress in manufacturing. However, there are other aspects of leadership and outlook that are harder to objectively measure.
One of those words is "optimism," or how confident manufacturing CEOs are that the hardest economic times are behind them and the future, starting now, looks bright. According to the seventh annual poll by Prime Advantage, more than half of all executives feel assured that 2015 will be a year of growth and expansion. This marks a record high since the survey's inception in 2008.
"For the past several years, significantly more CFOs expressed confidence in their own companies than in the economy overall," the company said, according to trade site Manufacturing.net. "But there is now rising confidence in the U.S. economy with 50 percent expecting growth."
With optimism on the rise, the converse is also true: Pessimism about the federal budget deficit and the solvency of government management has declined by nearly 40 percent, according to the study.
For more evidence that things are improving, 90 percent of respondents expect 2015 to match or exceed the totals of 2014. Heading into the second quarter of this year, many companies reported that they were already on track to meet those growth objectives, an encouraging data point that tells a story of resilience. Yet more impressive are the 96 percent of survey participants who said their businesses are expecting to add new manufacturing equipment this year. Sixty-seven percent said they were prepared to roll out new products and services, and 44 percent said they intended to expand their research and development budgets this year.
The survey focused on mid-sized manufacturers, some of the hardest-hit by the recession.
This good news isn't to say the industry doesn't face challenges. One of the topics we've covered most extensively on this blog is the reported skilled labor shortage, which threatens to slow progress for companies of all sizes. From small machine shops to large manufacturing operations, industry leaders have felt the pressure to get creative in their procurement, recruitment and training efforts. This has given way to private-public partnerships with universities and the restoration of apprenticeship programs.
Advanced manufacturing is another factor driving innovation in the industry. With hundreds of millions of federal dollars earmarked for the development of those practices, technology-based manufacturing solutions should trickle down to every corner of the industry over the next several years. To be competitive globally, industry leaders need to leverage their optimism to create hard and fast results.