Manufacturers continue to express mixed feelings about their economic future, as leading indicators show an expected decline in demand leads primarily international markets. First quarter surveys by the National Association of Manufacturers and PricewaterhouseCoopers show optimism waning for the remainder of 2016. The NAM survey showed the number of manufacturers reporting a positive outlook declining to 56 percent, its sixth quarterly drop and the lowest level since the fourth quarter of 2014.
PwC’s quarterly Manufacturing Barometer showed similar results, though it did find plenty of optimism for the U.S. economy. A majority of manufacturers reported they believed the U.S. economy was growing in the first quarter, which is likely a major reason why 72 percent of survey respondents forecast revenue growth in the year ahead. Industrial manufacturers see slower growth, with survey respondents forecasting average revenue growth of 3.7 percent over the next 12 months.
The latest Pricewaterhouse Coopers manufacturing barometer report finds that companies are still making plans to hire, but not as aggressively as in the past. About 38% of manufacturers reported they plan to add employees to their workforce over the next 12 months, off from 42% last quarter and 52% a year ago (off 14 points). About 12% plan to reduce their workforce, and the majority, 50%, plan to stay about the same.
Types of employees manufacturers plan to hire focused a bit more on professionals, 27% – chiefly technology/engineering (23%) – and blue collar workers, 22% (down 7 points this quarter), including skilled/specialized workers (15%) and semi-skilled or unskilled workers (17%).
Nearly 76% of companies said the cost of energy will become significantly lower for U.S. manufacturers. Only 24% disagree.
About 64% of industrial manufacturing companies are planning for lower overall energy costs over the next 12-18 months, averaging approximately 4.2% lower. Another 36% report no plans.
Just above half, 52% of industrial manufacturers believe current energy prices have had a positive impact on their company during the past 12 months – largely split between a moderate 55%, or limited impact 41%, with only 4% percent strong impact. Another 38% believe it had very little impact at all, and 10% a negative impact (oil-related companies).
3D Printing adoption by manufacturers
Nearly 71.1% of U.S. manufacturers are applying 3D printing technology in some way, up slightly from 67% in 2014. But, there are shifts in how the technology is being used. A higher percentage of manufacturers, 31.4%, compared to two years ago are using it for prototyping, 6.6% for the production of end-products, and 13.2% use the technology for both. At the same time, 17.4% are merely “experimenting to determine” how the technology may be useful to their operations — down from two years ago when 28.9% said they were in the tinkering phase.