Majority of Manufacturers Remain Positive
Randy Wolken, President & CEO
The National Association of Manufacturers (NAM) recently released its 2023 First Quarter Manufacturers’ Outlook Survey, which indicates that manufacturers have significant concerns around the recession, hiring, and their supply chains. NAM conducted the survey from February 21 to March 7, 2023. However, despite multiple concerns, most of those surveyed remain optimistic, with 74.7% of respondents maintaining a positive outlook for their company.
Key Findings from the Survey:
- Manufacturing Sentiment Rose in Q1 but Remains Just Below Historical Average: The survey indicates that 74.7% of respondents feel either somewhat or very positive in their company outlook, up from 68.9% in the fourth quarter, which had been the lowest since the third quarter of 2020.
- Recession Expectations Were Split: Just more than 49% of manufacturers believe that the U.S. economy will experience a recession in 2023. This is down from 62.4% who said the same thing in the prior survey. At the same time, 14.5% feel that the economy will avoid a recession, with 36.1% uncertain.
- Workforce Challenges Continue to Dominate: Three-quarters of manufacturers cite the inability to attract and retain employees as their top primary challenge. This is followed by concerns about increased raw material costs (60.1%), supply chain challenges (55.8%), rising health care and insurance costs (51.6%), a weaker domestic economy (50.7%), and an unfavorable business climate (45.9%), among other challenges.
- More Than 60% of Manufacturers Expect Improvement in Supply Chains by Year’s End: In the latest survey, 21.5% of respondents suggested that supply chain disruptions had either already abated or would do so in the current quarter. With nearly 40% anticipating improvement in the next three quarters, 61.3% predict supply chain abatement by the end of 2023, and 83.4% forecast improvement by the end of 2024.
- The Inability to Find Enough Workers Comes with a Cost: More than 59% of respondents said that not having enough employees will impact their ability to make investments or expand. In contrast, 32.2% said that the lack of workers will not have an impact, with 8.7% uncertain. On the topic of workforce, 46.8% said their company offers flexible scheduling where possible to production workers. Other forms of flexibility for production workers include offering remote work (36.1%), a compressed workweek (29.7%) and the ability to swap or split shifts (12.2%), among others.
As the survey indicates, the coming months will test capabilities of the manufacturing sector. At MACNY, we have seen just how resilient our members have been. We stand prepared to assist in helping you thrive in these challenging times. Thanks for all you are doing for our communities throughout New York State.