Impacts of financial decisions
Manufacturers and Distributors Less Uncertain About the Economy
Despite indications that stronger, more sustainable economic growth is finally catching up to them, manufacturing and distribution leaders still see economic uncertainty in their future. The good news is that, according to a CliftonLarsonAllen survey, economic uncertainty is no longer a top-of-mind concern.
For the third straight year, respondents to CLA’s annual survey of the manufacturing and distribution industry have listed “economic and political uncertainty” as one of their top concerns over the next two years. But the trend is downward: In 2012, 51 percent listed uncertainty first; in 2013, it was 46 percent.
Manufacturing and Distribution Outlook: Planning for 2015
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For 2014, it slipped to 36 percent and “pricing and margin compression” replaced it as the top concern.
“It is encouraging to see this downward trend over the past three years,” says Erik Skie, managing principal for manufacturing and distribution with CLA. “Economic uncertainty has become an accepted reality for business owners and leaders, along with the uncertainty that is inherent in virtually all supply chains.”
“The key focus right now is challenging their thinking around pricing and capacity management, and ensuring their pricing strategies are flexible enough to stay competitive with existing business while expanding into new markets and customers,” continues Skie. “This is essential for effectively utilizing existing capacity and reducing overall business risk and volatility.”
Skie says the drop is indicative of a broader trend of manufacturers and distributors becoming more focused on the business issues that they can control, and not on forces that are, for the most part, out of their hands.
“Economic uncertainty affects all competitors in a market or supply chain. The most successful manufacturers today are focused on actions they can take to separate them from their competition.”
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Learn more about what’s on the minds of manufacturing and distribution leaders in Manufacturing and Distribution Outlook: Planning for 2015.