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Industrial Market Outlook – Status and Trends

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Post-Pandemic

“Adjusting to the new normal”

Manufacturers have expended and invested an enormous amount of resources in reaction to the conditions caused by COVID. With the benefit of time and perspective, it is becoming clear that these investments are creating the underpinnings for longer-term benefits, resiliency and adaptability for the new consumer and industrial normal. From new safety measures like employee temperature checks, to re-arrangement of the factory floor, to more flexibility for employees to work from home when possible, post-COVID industrial market trends have introduced previously unthought of efficiencies and processes that appear poised to yield productivity and safety benefits for years to come.

COVID also caused manufacturers to more aggressively pursue measures they had been evaluating before the pandemic. Expect manufacturers to continue increasing their adoption of automation and digitalization initiatives and take a closer look at ways to make their supply chains even more resilient.

78% of CEOs surveyed by MAPI say their factory floors will have permanent design changes for worker health/safety

Labor

“Finding qualified workers hasn’t gotten any easier”

Labor remains a major structural issue impacting manufacturing. A recent Manufacturers’ Outlook Survey indicates that manufacturers are still concerned about finding qualified workers, even in light of some recovery of jobs lost to the pandemic. Much of this concern can be attributed to a skills mismatch; available workers don’t necessarily have the skills needed by manufacturers today. Compounding the issue is the retirement of Baby Boomers; most will retire in the next few years and take lots of institutional knowledge with them, making it harder to bring new workers up to speed.

The skills gap was a known issue long before the onset of COVID. With the compounding effects of jobs lost in the early stages of the pandemic, manufacturers have become more proactive than ever in attracting younger workers with the technical skills needed to replace retirees and those who lost jobs as a result of COVID. These methods include a greater focus on training programs, a further shift towards technology and automation, and a sustained focus on creating a culture that attracts and retains employees.

Meanwhile, residual and lingering COVID effects have added another layer of concern to the workforce challenge. Manufacturers will likely deal with high rates of absenteeism on an ongoing basis, and need to accommodate a greater level of remote working. According to a recent MAPI study, 52% of manufacturers say that at least 1 in 4 of their salaried professionals will work remotely on a typical day.

Re-Shoring and Supply Chains

“Resilience is the new mandate”

Supply chain disruptions this year have amplified the conversation around re-shoring and supply chain management. According to NAM, more than 60% of respondents to a Manufacturing Leadership Council survey said they will increase their focus on supply chain resiliency in the future, with 43% suggesting that they will explore more local production or re-shoring.

Even before the pandemic, re-shoring and supply chain resiliency were hot topics due to the increased costs of working in China, advances in automation, and the rise in the number of trade disputes. The trend seems to point towards more regionalized production and redundancy in suppliers in order to withstand shocks, from pandemics to trade wars.

A McKinsey study finds 70% of manufacturers expect to change global sourcing strategies, with 32% planning to relocate

Industry 4.0

“Building the ‘factory of the future’ on the fly”

The COVID outbreak has led many manufacturers to speed up smart factory initiatives. According to Forrester Research, “The need for a rapid response to the pandemic removed obstacles to adoption” for technologies like 3D printing, augmented reality, and remote services. Many manufacturers will look to recruit knowledge workers to operate the factory of the future and 20% of manufacturers will migrate their disaster recovery strategies to resiliency strategies for running the factory floor with minimal on-site personnel.

The long-term COVID response plan will also include a greater focus on automation and building the smart factory. This involves processes built on sensors, data and technology that are able to continue operating even with fewer — or no — workers present in the facility. Much of today’s automation technology includes onboard remote capabilities that enable workers to monitor and operate machines and processes from anywhere.

Diversity

“The Movement is Gaining Momentum”

Manufacturers will be more aggressive in efforts to expand diversity in their workforce, including efforts to fill roles with more black, Hispanic, and female applicants. They will follow the lead of groups like the Manufacturing Institute’s Task Force on Closing the Opportunity Gap, which seeks to have the manufacturing workforce reflect the diversity of America by 2030. Additionally, manufacturing CEOs have become more outspoken in terms of racial and social justice issues, which should increase the pressure on their companies to implement change.

Cybersecurity

With the rise in automation and technology-based processes, cybersecurity is a more important concern than ever. Although most automation is built on local, closed networks that are difficult, if not impossible, for hackers and other cyber attackers to access, the fact remains that industrial facilities remain attractive targets for these criminals. Like nearly any other business, operational technology (OT), information technology (IT) and external networks remain vulnerable, and must be protected through infrastructure, employee education and defined processes that focus on preventing cyberattacks.

Industrial Market Forecast

The overall industrial market outlook for the manufacturing industry is strong — and has only been bolstered by the changes implemented in response to COVID. In addition to improvements in efficiency, technology, safe infrastructure and employee satisfaction, there are a number of strong indicators working in favor of the industry. These include:

  • High industrial demand in spite of global economic challenges
  • Increased availability of materials and supply chain recovery
  • Strong underlying market fundamentals

As a technology-driven leader in outsourced industrial maintenance, ATS is ready to answer any questions you may have about how to take advantage of the latest in maintenance trends and technologies to overcome the industry’s present and future challenges. We’ll work with you to enable the maximum benefit to your operations. For more information, contact us today.

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