Continued Concerns Around Demand, COVID-19, Capacity, Supply Chains, and U.S. Election Results
ARLINGTON, Va., July 16, 2020 /PRNewswire/ -- The Manufacturers Alliance for Productivity and Innovation (MAPI) released the results from a CEO and a finance leadership manufacturer peer pulse survey from executives at large manufacturing companies.
While recent economic data is showing manufacturing recovery accelerating based on May and June information, our results are forecasting that the second half of the year might not sustain the momentum due to a variety of factors.
Manufacturing CEOs and finance leaders agree:
- Demand and full recovery to pre-COVID-19 levels will likely only occur with a vaccine.
- Revenue in the second half of 2020 will not rebound to pre-COVID levels a year ago (no V-shaped recovery).
- Operations shift with China "decoupling." Leaders believe more supply chains and production will move onshore with in-country locations of end customers. Over half of CFOs expect global supply chain diversification in the second half as well.
- The results of the U.S. presidential election will affect manufacturing output, 81% of CEOs and 61% of CFOs believe.
The MAPI CEO survey also found that business operations will change:
- Ninety percent of CEOs are finding additional ways to commit and grow diversity and inclusion (D&I) efforts at their companies.
- Digitalization of distribution is planned to fuel growth for 2/3 of companies while investment in digitally-enabled smart factory initiatives also picks up.
- No consensus on what the future of work will look like with telework, travel, and workspaces.
The MAPI finance leadership survey additionally found:
- Capacity utilization still lags. Nearly 8 in 10 executives report operating rates are lower than a year ago.
- Liquidity management and cost containment remain aggressive and reflect conservative assumptions.
- Employment rebounding to a pre-recession level is unlikely as hiring freezes and furloughs are expected to continue.
"We are living through an unprecedented time and manufacturers are facing many headwinds in the foreseeable future. That visibility is very limited, and we cannot anticipate how the pandemic will evolve in coming months. What we do know is that manufacturers are adapting and finding innovative ways to continue operations, reorient toward growth opportunities, and protect employees as we come together to rebound from this crisis," remarked David Beckoff, VP of Product Development and Insights, MAPI.
See the key findings of our CEO survey "Ten Trends Shaping U.S. Manufacturing in the Next Twelve Months" and the survey of financial leaders in "Manufacturer Peer Pulse: Financial Outlook for H2 2020." MAPI members have access to detailed reports. You can learn more about membership here.
Founded in 1933, the Manufacturers Alliance for Productivity and Innovation (MAPI) is a nonprofit organization that connects manufacturing leaders with the ideas they need to make smarter decisions. As the manufacturing leadership network, its mission is powering leaders within manufacturing to drive the growth, profitability, and stature of global manufacturers. For more information, visit mapi.net.