Industries

2016 Manufacturing Industry Outlook

In its 10th year, the EKS&H Business Outlook Survey has grown to become an informative barometer of executives and owners of middle market companies representing a wide variety of business sizes, industries, and ownership types. In addition, we provide further analysis on many industries in which EKS&H clients operate. Highlights from the manufacturing industry appear below.

OVERVIEW

Although the industry is growing, many manufacturers faced softer demand in 2015 than originally anticipated. This is particularly true for businesses with a significant percent of international customers that are dealing with the challenges of a strong dollar and less stable international markets. Growth in domestic consumer and business spending might help manufacturers in 2016; however, caution and uncertainty are the sentiment in many sub-sectors. Factors that will impact manufacturers’ performance include:
  • Unknown regulatory, environmental, and tax changes might be a result of political change in 2016, which will especially impact industrial manufacturers.
  • Costs of supplies, raw materials, and ingredients might have a dramatic impact on craft brewers and other food and beverage manufacturers.
  • The overall health of the economy will impact consumer confidence and spending, particularly for outdoor and sporting goods manufacturers.
  • Technology might deliver significant operational efficiencies and innovations that rapidly impact the bioscience, medical, and other high-tech manufacturers.
In addition to issues that affect specific manufacturing industries, other challenges exist across the board, such as rising healthcare and insurance costs, local and global competition, and difficulty in finding reliable and skilled labor.

SURVEY SPOTLIGHT

When asked about production measures and profitability metrics, almost three-fourths of respondents indicated that they will be looking at product profitability ratings in 2016. Accurate data for strategic cost accounting is critically important for this strategy. Other top measures for 2016 include inventory turns, delivery ratings, product quality ratings, and capacity utilization, each of which are planned by more than half of manufacturing respondents.



For more information, download the complete business outlook survey.