Positive signs in Manufacturing Vitality Index

Posted on Feb 3, 2011 :: Insight on Business, Web Exclusive.
Posted by of Insight Publications

When the Northeast Wisconsin Manufacturing Alliance (NEWMA) announced the results of its first Manufacturing Vitality Index survey this week at the University of Wisconsin Oshkosh, it offered lots of good news for the regional economy and for manufacturing in particular. The Alliance sponsored the 2011 Manufacturing Vitality Index report, produced by UWO’s Business Success Center through surveys administered in late 2010. The survey included responses from 179 manufacturers in Northeast Wisconsin with $3 million or more in annual revenue and 25 or more employees.

Manufacturers’ plans in 2011 for sales growth, capital investments and additional hiring are all strong, positive indicators of the vitality of the manufacturing community in the New North, according the report’s executive summary. In addition, 92 percent of respondents indicated that they expect their financial health in the next six to 12 months to be “healthy or quite healthy.”

The report offers considerable insight into the status of manufacturing in the New North, says Jeff Pallini, president of Fosber America and chair of the NEW Manufacturing Alliance.  

“Although I have heard a lot of positive feedback from my colleagues about their businesses, we felt as an organization that it was important to have a better understanding of the vitality of the industry as it pertains to our area,” Pallini says.

 Results of the survey suggest that the region’s manufacturing base is poised for continued recovery in 2011, with 59 percent of respondents reporting increased sales in 2010. Expectations for new sales growth are even higher for the coming year.

Forty-one percent of firms are planning some form of capital expansion in the next two years, with the median investment is $250,000. Similarly, 48 percent of firms are planning plant modernization at a median investment of $225,000.  This suggests that almost half of the manufacturers polled are making some form of investment in capital expansion and modernization.

“That’s an important indication of job and economic growth for our region,” says Pallini, “and it’s good news for commercial construction firms in our region.”  

There are also positive signs for hiring in 2011, with 41 percent of respondents expecting to hire staff sometime in 2011, with the bulk of new staff coming from the local labor force. About the only negative sign in the survey is that manufacturers are having trouble finding the workforce they need. A little more than one out of four companies anticipates difficulty locating and acquiring appropriate talent.

“That is the ultimate challenge for educators in our region –- to provide the curriculum, degree programs and training needed to provide the skilled workforce employers are going to need,” says UW–Oshkosh Vice Chancellor Thomas Sonnleitner.

In order to meet the challenges presented in the findings, the NEW Manufacturing Alliance recommends building on current partnerships and fostering new relationships, both within the region’s manufacturing base, as well as between manufacturers and local educators. According to the report, such strong connections will lead to the development of “a robust supply chain to support regional growth and to retain capital investments; a unified voice to advocate for the region’s manufacturing needs; a flexible, responsive education and training infrastructure to support the changing skill demands of advanced manufacturing; and the creation and retention of a dynamic, skilled workforce to sustain and grow the region’s manufacturing base today and into the future.”

Wisconsin Commerce Secretary Paul Jadin calls the Manufacturing Vitality Index report “an important and historic opportunity for manufacturing in the region.”

Jerry Murphy, executive director of the New North, Inc., says the report “provides a strategic tool and provides the impetus that will drive tactical considerations about how we provide the workforce of the future.”

The NEW Manufacturing Alliance is a partnership of more than 80 manufacturers, educational institutions, workforce development boards, chambers of commerce, economic development and government entities in the 18 county New North region.  For more information go to:  www.newmfgalliance.org, contact Ann Franz at (920) 498-5587 or email her at [email protected]

– By Rick Berg