U.S. Manufacturing Positive Outlook for 2024

December 5th, 2023

In the ever-evolving landscape of the U.S. economy, the manufacturing sector stands out as one of the most important yet dynamic industries. In recent years, its resilience has been tested by an array of challenges stemming from the aftermath of the COVID-19 pandemic, technological disruptions and fierce global competition.

Wipfli LLP, a leading advisory and accounting firm, sought to unravel how manufacturers are navigating these hurdles while shaping their future. Through a comprehensive survey, encompassing insights from over 330 directors and C-level executives, some acuity was provided as to the current state and outlook of the production sector. These results are published in the 2024 State of Manufacturing report and predict an optimistic outcome next year.

Below we dive into a few key trends that are expected to be notable in 2024 and how companies are responding.

Confidence in Revenue and Market Prospects

Despite the setbacks inflicted by the pandemic, manufacturers showcase remarkable strength and adaptability. According to the survey, an impressive 88% of respondents anticipate increased revenue in 2024. Their strategic focus revolves around reaching new customers and exploring existing markets to achieve growth objectives. This optimism reflects confidence in bouncing back from setbacks and seizing emerging opportunities.

Digital transformation also will likely be critical as companies work to stay at the forefront of new advances. Manufacturing technology looks vastly different than it did just five to ten years ago, and it has been playing a pivotal role in influencing the industry. These high-tech developments offer valuable information in areas such as improved decision making, enhanced operational efficiency/safety and better team member access. Although innovation often involves additional investment from a company, it generally turns out to pay off in the end.  

Workforce Challenges

The perennial struggle for businesses lies in securing and retaining qualified, skilled personnel. This analysis indicates that 63% of respondents rank employee retention as their top concern, closely followed by employee attraction at 51%. To address this matter, companies are proactively boosting pay, refining benefits and introducing additional perks to retain and attract talent. This approach also translates to increased budget costs, thereby likely impacting overall profitability.

Even so, there has been a noticeable decrease in skillful manufacturing employees across the U.S. which has turned into an overall lower demand. As processes become more proficient, there is a larger focus on quality of products versus quantity of employees. The drift further contributes to the importance of maintaining a solid workforce and an environment that not only invites capable workers but also retains them over the long term.  

Emphasis on Cybersecurity and Digital Transformation

Ensuring the security/integrity of data and systems emerges as another pivotal challenge. The study reveals that 35% of respondents experienced three or more incidents of unauthorized data entry during the previous year – posing risks of financial losses, reputational damage and legal liabilities. To counter these threats, 70% heightened their investments in cybersecurity measures.

Moreover, a staggering 99% of replies prioritize digital advancement, with 71% planning to augment their funds into Industry 4.0 technologies such as robotics, automation and artificial intelligence (AI). These tools promise greater productivity, quality, and modernization, while also paving the way for new business models and value propositions.

Supply Chain Disruptions and Inflationary Pressures

Manufacturers grapple with the repercussions of supply chain disruptions and escalating costs due to inflation. Such destabilizing factors threaten their ability to meet customer demand, maintain inventory levels and control expenses. The survey underscores that distribution issues and inflation are prominent macroeconomic concerns for industrialists, along with the looming risk of a recession.

To surmount these impacts, manufacturers must adopt more agile and resilient strategies, including diversifying resources, amping up visibility and fostering collaboration with partners. Another common tendency has been shifting to additional local manufacturing partners that are more relationship based. This approach has proven advantageous, as outlined in our August article, The Shift to Local Manufacturing Partners and the Plastics Industry.

As much of what we do can be motivated by economic inclinations, Slide works diligently to stay on top of new movements and any challenges within the plastics industry. As we finish out 2023, we want to say thank you to all our partners and look forward to giving you our dedicated support in the New Year!

The insights presented in the 2024 State of Manufacturing report are drawn from responses provided by over 330 manufacturers across the country, representing 32 states and various subsectors.