Manufacturers exhibit cautious optimism in Paranet survey

Manufacturers are bullish about the year ahead, but are more cautious than in 2012, according to a survey conducted recently by The Paranet Group.

The Paranet Group, based in Wauwatosa, is a manufacturing trade organization providing best practices for companies in Wisconsin and Illinois. The survey included more than 100 manufacturers.

Of those surveyed, 90 percent have a positive feeling about manufacturing in the Midwest.

But just 56 percent of respondents reported an increase in sales at the end of 2013, down from 67 percent at the end of 2012. However, 63 percent said they are now in a growth period going forward.

Last year was challenging for the manufacturing industry because of weakness in the global economy, an unfavorable tax environment, sporadic and uneven customer demand, a dysfunctional government, high commodity prices and shortages, the mining and construction drop-off, disruption and expenses from external influences like the Affordable Care Act, reduced consumer spending, reduced military spending and lack of skilled workers, respondents said.

Just 49 percent of those surveyed increased their hourly workforce in 2013, down from 56 percent in 2012. And 53 percent increased their salaried workforce, down from 56 percent in 2012. While 78 percent planned to hire going into 2013, just 50 percent plan to complete hiring in 2014.

According to Rick Sievert, vice president of global supply strategy at Husco International, the future of Midwest manufacturing is “marginal – the advantages of experience and skilled workers (versus regions with lower wages) are eroding as workers retire; the next generation here is no better prepared than in states without unions and with lower wages.”

Respondents said a strong Midwest manufacturing presence requires a reduced tax burden, an improved regulatory environment, assistance in attracting and retaining talent/skills/youth among people who want to work, a focus on value-added manufacturing and increased automation and embracing a continuous improvement culture and lean principles.

Brian Bloczynski, vice president of manufacturing at Kondex Corp., said “I’m pretty bullish. I see a lot of reinvestment in existing businesses and, contrary to what I read in the press, a solid skilled worker population. Those companies willing to modernize and benchmark/adopt best practices are the one that are more successful. For the first time, we are seeing opportunities for work that will be sold into Asian markets, mostly because the products we will provide are complicated and difficult to manufacture. I suspect that there is a lot more work moving back to the States than I previously thought.”

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