2013 State of the Industry: How to Navigate Economic Uncertainty

Insights for Strategy and Planning: Fabrication and metalworking executives share their personal assessments of the current state of business, the market sectors they see with the most business activity, the critical issues and major trends that are developing within the industry, and how advancements in technology are changing the way companies will compete during the coming year.

As this goes to print and we prepare to enter the New Year, current and pending policies in Washington threaten the future growth of the U.S. manufacturing industry according to the keynote speaker at the annual meeting of the Business of Council of Alabama and the Chamber of Commerce Association of Alabama held in December in Birmingham, AL.

Jay Timmons, the president and chief executive of the National Association of Manufacturers (NAM; Washington, DC), told the audience that even though about half a million manufacturing jobs across the country remain unfilled because of a lack of qualified workers, the sector faces a greater challenge with key political hurdles that are creating economic uncertainty. What are they?

Timmons explained that federal tax, regulatory and energy policies make manufacturing in the U.S. 20 percent more expensive than anywhere else in the world among our major trading partners, even when labor costs are factored out of the equation. Then add the “fiscal cliff” implications of higher taxes and reduced spending that will increase individual tax rates and investment tax rates and impact manufacturers.

Now for the good news: Though all of this economic uncertainty has weakened much of the optimism that many manufacturers held during 2012, the insights that follow can reveal many opportunities that still exist to make money in the fabrication and metalworking sectors during the coming year. We invited our special panel of executives to respond to these questions:

1. Please give your personal assessment of the current state of business as we enter the new year. Is it (a) strong, (b) stable and increasing, (c) stable but decreasing, or (d) weak? What market sectors are you seeing the most activity? What product applications are you seeing the most opportunities? Please explain.
2. Please identify and elaborate on the major trends that you see developing in the industry during the coming year. How are advancements in technology changing the way your customers compete? What impact, if any, is this having on how you plan, create and provide solutions to them?
3. Please identify the critical issues that you see facing the industry in the coming year.
4. Please propose the respective strategy (if you have one) that would address each respective critical issue you have identified in (3) above.
5. Please share any additional personal insights you might have on the current state of the industry.

We hope the information they have shared here will help you plan and develop your own strategy for the business climate that lies ahead.