Manufacturing & Distribution Forecast

This is one of the most exciting times to be in manufacturing. This wasn't always the case. The Great Recession put a damper on a lot of manufacturing output and many are still recovering. With the convergence of new technologies, the U.S. manufacturing sector has a bright future, as long as companies are willing to embrace the new technologies that are shaping the industry for the next century and beyond. 

The Manufacturing Industry Could See Growth Outside Existing Markets

Established manufacturing companies are often risk averse. When business leaders are able to precisely target their customers, a tried-and-true method of reliable sales to keep shipping product. The problem with minimizing risk is that companies often compete for the same types of customers. When a product category becomes entrenched, beating the completion often takes priority over creating new product lines or exploring new markets. Take for instance, only 32 percent of manufacturing companies in 2015 planned to invest less than 1 percent into new markets (Source).

The Skills Gap in Hiring is a Current Speed BumpERP CRM Manufacturing

The incredible growth and change happening in the manufacturing industry is causing a pain point in regards to finding the right talent with the right set of skills. 3D printing and the Internet of Things (IoT) are going to take center stage with the whole world being connected. Basically, the manufacturing world from 30 years ago isn't the same one today. That creates demand for both trade and technology skills that many people don't have. The good news is that emphasis on STEM education will provide a new generation with the skills to create a workforce who can take manufacturing to the next level.

Supply Chain Management Will Strengthen or Weaken Growth

Manufacturers who can streamline and maximize their supply chains will be the ones best poised to growth. In the 2015 Sikich Manufacturing Report, nearly 60 percent of respondents say supply chain is important or highly important to their continued success. Reduced response times and product creation speed are two significant areas where companies will be spending their time improving. Failure to implement any improvements on supply chain can hold up revenue growth on the bottom line and let more streamlined competition to catapult ahead.



Industry Intelligence from First Research, a division of Hoover's (a D&B company)

Manufacturing Production Growth Stabilizes
The output of the U.S. manufacturing sector is forecast to grow at an annual compounded rate of 5 percent between 2014 and 2018. Data Published: February 2014

Wholesale Industry Growth Improves
The output of the U.S. wholesale industry is forecast to grow at an annual compounded rate of 5 percent between 2014 and 2018.  Data Published: February 2014

Warehousing and Storage Growth Rises
The output of U.S. warehousing and storage services is forecast to grow at an annual compounded rate of 5
percent between 2014 and 2018. Data Published: February 2014

First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.

Manufacturing Quarterly Industry Update


Opportunity: Manufacturing Growth Continues - U.S. manufacturing activity increased in May 2014 for the 12th consecutive month, according to the Institute for Supply Management (ISM). Of the 18 manufacturing industries reporting to the ISM, all but one of them, textile mills, reported growth in May. Industries experiencing the strongest growth included furniture and related products, electrical equipment, appliances and components, primary metals, fabricated metal products, nonmetallic mineral products, and machinery. While manufacturers generally reported solid growth in production and new orders, employment growth showed signs of slowing. Manufacturers said rising raw materials prices and tightness of supplies were cause for concern.

Industry Impact - As production and new orders continue to grow, U.S. manufacturers may work to improve margins by addressing issues such as higher raw materials costs and growing tightness and shortages in some supply chains.

Wholesale Quarterly Industry Report


Trend: Growth in Third-party Logistics
- Third-party logistics firms are playing a growing role in the U.S. transportation and logistics industry. Gross revenues of third-party logistics are expected to exceed 11 percent of the total U.S. logistics costs by the end of 2014, according to an Armstrong & Associates forecast. Third-party logistics revenues are forecast to grow faster than the U.S. gross domestic product for the "foreseeable future," according to the report. More companies are outsourcing their complex distribution functions to third-party logistics firms to lower their capital investments and improve efficiency. Some wholesalers offer third-party logistics services to customers.

Industry Impact - Wholesalers may want to increase their third-party logistics services to generate additional revenue streams.

Warehousing & Storage Quarterly Industry Report


Trend: More Warehouses "Going Green" - Warehouses are increasingly using sustainable practices such as "going green" to reduce costs and as a competitive advantage. The industry association International Warehouse Logistics Association (IWLA) is encouraging members to adopt sustainable practices through its Sustainability Council and the Sustainable Logistics Initiative. The IWLA urges companies to track their energy use and production to measure their ROI after instituting energy saving measures. Many larger companies are already adopting such practices, but the IWLA is now focusing on smaller warehousing companies. The IWLA will reduce membership fees and provide companies with sustainability plans and budgets to make environmental efficiency projects more attractive to smaller entities, according to DC Velocity.

Industry Impact - As more companies institute sustainability practices they may find greater profits and lower costs due to lower energy use.
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