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Industry Pulse:

Manufacturing & Distribution Q2 2021 Results
The Sikich Industry Pulse surveys manufacturing and distribution executives from across the nation multiple times throughout the year, highlighting and responding to top trends as they arise. The Pulse results provide readers with real-time competitive intel to adjust and apply to their business strategies.
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In June 2021, Sikich surveyed more than 150 manufacturing and distribution executives from across sectors and the nation

While industry executives’ optimism looks steady and even slightly higher than Q1, supply chain interruptions and attracting talent are top of mind.  

The Q2 Sikich Industry Pulse surveyed manufacturing and distribution executives like you to uncover the challenges and trends in Q2 and expectations for the year ahead. 

We found that manufacturers and distributors are getting creative in times of supply chain interruption, with more than 30% of respondents stating they are manufacturing more products or components in the country than they were previously. As the future of supply chain remains unpredictable, it’s important to have a Plan B (and even C). 

Further, the war for talent continues, and manufacturing and distribution executives must look beyond wages to attract and retain top talent. Nearly half of surveyed individuals offer shop floor employees compensation packages ranging between $50,000 and $80,000. Employees are now seeking additional perks to join and stay at companies, like free company apparel or educational opportunities. What sets your company apart?

Learn more over the next few pages in this quarter’s Sikich Industry Pulse. And, stay tuned for additional insights and real-time data throughout 2021.


Jerry Murphy, CPA, CMA, CGMA, Partner-in-Charge
Manufacturing & Distribution Services

Q2 Results

Optimism about business prospects in the next 6 months
Level of Optimism (1 = not optimistic at all, 10 = extremely optimistic)
prospective buyers aren't just
eyeing houses
1 in 4 manufacturers
are considering purchasing a competitor in the next twelve months
while only 13% are considering selling a portion or all of their business.
Some manufacturers are more open to close-knit options like moving to an ESOP (2%), selling to management (2%) or passing the business to family members (9%).
Manufacturers and distributors getting creative in times of supply chain interruptions

34%

Manufacturing more products or components in the United States

18%

Sourcing purchased materials from new countries

16%

Diversifying their supplier pool

16%

Sourcing raw materials from new countries

10%

Stocking up on inventory in advance
Investing in new IT ahead of maintaining existing IT
IT INVESTMENTS
Percent of Annual Revenue
48% of respondents reported the global chip shortage has impacted their supply chain

0%

slightly impacted

0%

moderately impacted

0%

significantly impacted
Strong digital presence a must to
keep up with customer demands
Over half (56%) of the companies surveyed plan to increase their digital marketing efforts in the next 12 months.
FOCUS AREAS:

0%

website
upgrades

0%

social media
marketing

0%

search engine
optimization
Manufacturers plowing forward with CapEx investments despite unknown new corporate tax rate on the horizon

0%

respondents said they were not delaying CapEx investments
while 21% were unsure if they would delay investments or not.
mixed approaches
to covid-19 vaccine policies
51%
Encouraged their employees
to get the vaccine

23%
No formal vaccination policy

16%
Voluntary vaccination policy

8%
Incentivized employees to get vaccinated

2%
Required vaccinations

Shop Floor Wages and Benefits More
Competitive in Tight Labor Market
"In addition to total compensation packages, employers can offer some low or no-cost benefits to stand out in this competitive labor market. Some examples include childcare referral services, vendor discounts, free company branded apparel, and low cost supplemental programs like pet insurance or spousal life insurance.” – Sikich Experts
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THE RESULTS Industry Pulse:

Manufacturing & Distribution
The Sikich Industry Pulse surveys manufacturing and distribution executives from across the nation multiple times throughout the year, highlighting and responding to top trends as they arise. The Pulse results provide readers with real-time competitive intel to adjust and apply to their business strategies.
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Get Email Alerts

Industry Pulse

In 2020, manufacturers and distributors learned how to adapt to an unprecedented global pandemic. This year, they’re taking those lessons learned and positioning their companies for growth in a redefined marketplace (though, growing pains are inevitable).

In the Sikich Industry Pulse, our optimism index shows industry executives are hopeful about the coming six months. Their hope is coupled with the reality of continued hiring challenges and a heightened focus on validating and protecting their data. To overcome these challenges, I urge industry leaders to embrace automation, adopt innovation and challenge the status quo.

We’re challenging our own status quo by committing to survey the manufacturing and distribution industry multiple times throughout 2021, providing real-time data for our clients and colleagues.

Stay tuned!

 

Jerry Murphy, CPA, CMA, CGMA, Partner-in-Charge
Manufacturing & Distribution Services

Q1 Results

INDUSTRY EXECUTIVES fairly
optimistic
one year after
pandemic shock
DESPITE NATIONAL UNEMPLOYMENT RATE, FILLING OPEN POSITIONS still a challenge.
According to the U.S. Bureau of Labor Statistics, “The [national] unemployment rate edged down to 6.0 percent in March. The rate is down considerably from its recent high in April 2020 but is 2.5 percentage points higher than its pre-pandemic level in February 2020.”

0%

of respondents
plan to increase their workforce
in the next
six months
But only 5% are completely confident in their ability to obtain the talent required
uncertainty
looms over
employee retention credit eligibility

of manufacturers and distributors don't plan to take advantage of or are unsure if they qualify for the credit
Get your questions about the Employee Retention Credit answered here
Business sales already on the horizon? Succession plans LARGELY UNCHANGED by pandemic conditions.
70% of respondents said their business succession plans remain the same, and our experts want to know more.
4%
Moving up plans by 3-5 years

7%
Moving up plans by 1-2 years

6%
Delaying plans by 3-5 years

13%
Unsure

70%
Plans remain the same

“I’ve seen plenty of manufacturing companies considering or actively selling part or all of their business in the near future. I have to question if those sticking with pre-pandemic succession plans already had a sale or tuck-in in their sights because the M&A market is hot.”
– Ray Lampner, Partner-in-Charge, CPA Consulting Services
ROOM FOR IMPROVEMENT IN USING AND PROTECTING DATA.
Nearly ¾ of executives are fairly or completely confident in using their existing data to make business decisions
More than half of manufacturers and distributors experienced at least 2 information security events in the past 12 months.
top reported incidents:

0%

email phishing scams

0%

unemployment fraud

0%

ransomware
“I’m most alarmed at the amount of ransomware events the industry experienced. A ransomware event has a lot of lasting ramifications, from permanently losing critical data to exposed sensitive customer and employee data to paying a hefty ransom to recover the data – these attacks are no joke.”
– Kevin Bong, Director, Information Security
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in the news

about sikich

Sikich offers a formula of technology-enabled professional services uniquely crafted to address your business’s challenges and opportunities. Our comprehensive skillsets obtained over decades of experience as entrepreneurs, business owners and industry innovators allow us to provide insights and transformative services to help strengthen every dimension of your business. 

Be the first to know when new stats are available!
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