The business climate for manufacturing in the U.S. has improved over the past few years, driving both revenue and employment growth for middle market manufacturers. But the industry is also experiencing a period of transformation that is both benefiting and challenging manufacturing companies nationwide.
That’s according to a new report from the National Center for the Middle Market (NCMM) and Chubb on the state of manufacturing in the U.S., which found that while many are optimistic about new opportunities for growth, 62 percent of companies rank increased competition and rising raw material costs as their top concerns, with potential trade tariffs adding to their worries.
According to the report, globalization was cited most frequently as the number one factor impacting the competitive business environment. Increasing demands for expediency are affecting both ends of the supply chain, and technology is transforming what manufacturers make and how they make it.
“Middle market manufacturers are experiencing overlapping waves of change — more intense competition, rapid changes in manufacturing technology, the need to offer new kinds of products and services, and more,” said Thomas A. Stewart, executive director of NCMM. “This change presents opportunities for companies that can take advantage of this industry evolution, while it creates huge risks for those who are unprepared.”
The report is based on interviews with 250 strategic and financial decision makers from middle market manufacturing companies between March 26 and April 6, 2018. The vast majority — 86 percent — say the business landscape is more competitive.
Technology is transforming the manufacturing process. In the past year, manufacturers have invested in automation, robotics and advanced manufacturing techniques, and 20 percent of companies now utilize smart technology wearables on the factory floor. But these advances come at a cost. Not only is there an increased need for capital, but it also exposes companies to greater cybersecurity risks.
“Along with opportunities comes risk,” said Mike Williams, Chubb’s EVP and manufacturing industry practice leader. “It has never been more critical for companies to review their risk mitigation strategies and ensure they have responsive insurance solutions in place.”
Topics Trends USA Commercial Lines Business Insurance Tech Manufacturing
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