December 13, 2022
Manufacturing Growth Predictions and Trends for 2023
45% of respondents in an ISM manufacturing survey estimate their business revenue in 2023 will increase by 14.9 percent, according to EPSNews.
Manufacturing growth is a key indicator of the health and strength of a country’s economy. When manufacturing is growing, it typically means that businesses are producing more goods and hiring more employees, which can have a ripple effect on other sectors of the economy. As reported below in the ISM manufacturing survey, most 2023 manufacturing statistics point to a positive outlook:
- Manufacturers’ operating rate is currently at 88.4 percent.
- Production capacity increased by 6.7 percent in 2022.
- Production capacity is expected to increase by 5.3 percent in 2023.
- Capital expenditures increased by 12 percent in 2022.
- Capital expenditures are expected to increase by 2.6 percent in 2023.
- Prices paid increased by 11.4 percent in 2022.
- Overall, 2023 prices paid are expected to increase by 2 percent.
- Labor and benefit costs are expected to increase by 5.8 percent in 2023.
- Manufacturing employment is predicted to increase by 3.9 percent in 2023.
- U.S. export growth is expected in 2023.
- U.S. import growth is expected in 2023.
The Growth of Manufacturing and Its Challenges
There are many benefits to manufacturing growth, both for businesses and the broader economy. For businesses, increased production can lead to higher profits and expansion opportunities. It can also lead to the creation of new jobs, both within the manufacturing sector and in related industries. For the economy, manufacturing growth can lead to increased exports and a stronger balance of trade. It can also stimulate growth in other sectors, such as transportation and logistics, as more goods are being produced and shipped.
However, some challenges come with manufacturing growth. As businesses ramp up production, they may struggle to find enough skilled workers to meet the increased demand. This can lead to labor shortages and potentially higher wages, which can drive up the cost of production. Another buzzword we have relentlessly heard all year is “supply chain”. From our perspective, and those of other leading industry professionals, the supply chain catastrophes are coming to ease.
Manufacturing Trend Predictions in 2023
- Reshoring. MRT has been following this trend for months. Businesses are coming back to the United States and leaving China in hopes of less disruption within the supply chain. Disruption adds time and costs to production and assembly, leaving companies behind schedule and over budget. By bringing materials, assembly, and manufacturing back to the states, companies can have more control. U.S. manufacturing is massively supported by U.S. Americans. The higher price of a domestically manufactured product often is purchased over a more inexpensive foreign manufactured product. Harry Moser, Founder and President of Reshoring Initiative, states, “if you can get 10 percent more at retail for made in the USA, it alone will cover about 30 percent more in manufacturing costs.” You can read more on the benefits of reshoring here.
- Technology. If you have not invested already, you are behind. One thing is for sure- the supply chain disasters have taught us that technology is a critical investment.With the use of advanced technologies such as robotics, artificial intelligence, and the Internet of Things (IoT), manufacturers can automate repetitive tasks, reduce the need for manual labor, and improve the accuracy and consistency of their products. These technologies can also help manufacturers collect and analyze data to identify inefficiencies in their processes and make data-driven decisions to improve them. Technology investments help manufacturers stay competitive in an increasingly global and fast-paced market.
- Skills Gap. According to The Manufacturing Institute and Deloitte, the United States could see a manufacturing skills gap of 2.1 million unfilled jobs by 2030. The 2023 Deloitte manufacturing outlook survey reported that 74% of manufacturing executives reported finding the right talent for the job was their biggest challenge in 2022. Reskilling strategies are being implemented in facilities around the world. Investments in training and innovative technology are allowing manufacturing workers to stay competitive. Skilled talent is becoming increasingly harder to find, but government support has been a huge game-changer in 2022, as well as partnering with an experienced recruiting firm. You can read more about government intervention in manufacturing here.
- Hiring. To combat supply chain issues, strict deadlines, lack of materials, a global pandemic, and rising prices, manufacturing employers have had to find innovative solutions when it comes to hiring. One rising trend is contract staffing. Contracted employees are short-term solution providers. Often, they are used for specialized, niche projects, to help fill a gap, or to bring a new perspective on an issue. 59% of manufacturing employers plan to hire contract workers in 2023. To learn more about contract staffing and its potential click here.
Talent Management Help
Talent management is the second biggest priority for most manufacturing firms coming into 2023. MRT is continuously putting resources into our development to better serve the manufacturing industry. We have seen first-hand the benefits of creating a proper employment strategy. Scouting potential employees, the hiring process, the onboarding process, and the first few months of employment are all part of a vital period to recruit and retain talent. Please do not hesitate to reach out to any of the recruiters to create a talent management strategy for your firm in 2023. You can also fill out a contact form here.