Manufacturers remain overwhelmingly optimistic for 2024 despite a host of challenges, according to Wipfli survey
New report indicates more than 330 manufacturers surveyed are bullish on the economy, their future earnings and their rate of digital transformation.
Wipfli LLP (Wipfli), a top 20 advisory and accounting firm, published a report today based on a survey of more than 330 directors and C-level executives within the manufacturing sector to better understand their biggest challenges, their outlook on the economy and what's influencing their success. Despite the myriad challenges presented on the fronts of everything from technology and automation to employee retention and lingering supply chain issues, the 2024 State of Manufacturing report remains optimistic on what lies ahead. The resilience demonstrated by manufacturers throughout the pandemic has not only allowed them to weather the storm but also fostered a positive outlook for the future.
The survey results shed light on various factors impacting manufacturers' outlooks on both economic prospects and digital transformation efforts. Notably, an overwhelming 88% of respondents anticipate increased revenue for 2024. Strategically, most manufacturers surveyed are targeting new customers more frequently than existing customers and plan to focus on increasing product sales in existing markets in the coming year. This strong optimism underscores their confidence in rebounding from previous setbacks while leveraging emerging opportunities in an ever-evolving market.
An overwhelming 88% of those surveyed anticipate increased revenue for 2024.
"Manufacturers have shown remarkable resilience throughout these challenging times, a testament to their ability to adapt and thrive amidst uncertainty," said Bill Boucher, manufacturing, retail and distribution leader at Wipfli. "However, it's imperative that we address critical areas such as employee retention, data security and rising costs tied to inflation. Our research shows while there are many obstacles, there is even more untapped potential in the areas of digital technology and AI that need consideration as we move forward into 2024."
Amidst this positivity exist significant challenges that demand attention within the industry. Employee retention emerged as one of these key hurdles highlighted by respondents during the survey. Manufacturers are using increased pay and bonuses, better benefits and other perks to keep and attract top talent. Addressing this concern becomes paramount as companies strive to maintain stability and cultivate growth.
Data security poses another pressing challenge — an issue that requires diligent safeguarding measures given its potential ramifications if left unaddressed or mishandled. While this is still a pressing concern, 35% of respondents said they had three or more incidents of unauthorized access to data in the previous 12 months — a 10% decrease from 2021 — largely due to the 70% of manufacturers that increased their investment in cybersecurity measures.
Additionally, supply chain challenges and rising costs tied to inflation emerged as other points of concern voiced by those surveyed. Both challenges remain among the highest macroeconomic concerns for manufacturers along with the threat of a recession.
While acknowledging these obstacles is crucial for developing effective solutions moving forward, it is equally important to recognize areas where progress still awaits realization. Ninety-nine percent of manufacturers overwhelmingly prioritize digital advancement; however, only 47% have harnessed robotics or automation capabilities thus far — a statistic reflecting untapped potential within this realm.
"The fact that 71% of manufacturers intend to increase Industry 4.0 technology investment in 2024 speaks volumes to the potential and direction this industry is headed," Boucher added.
Similarly revealing is the fact that just 36% have successfully incorporated artificial intelligence into their business operations — underscoring room for further adoption and utilization of this transformative technology. These findings emphasize the need for continued dedication to digital transformation and technological advancement for manufacturers to maintain their status as leaders and innovators within the U.S. economy.
For the 2024 State of Manufacturing report, Wipfli collected responses from more than 330 manufacturers across the country — nearly all of whom were directors or C-level executives. The companies surveyed represent 32 states, with revenue ranging from $51 to $500 million. A full breakdown is available in the report.
About Wipfli LLP
With more than 3,200 associates and 59,000 clients, Wipfli ranks among the top 20 advisory and accounting firms in the nation. We support our clients in transforming through people, digital, financial and organizational optimization.