Manufacturers prioritizing employees amid uneven economic fallout from coronavirus, survey finds


The first in a series of planned surveys of manufacturing leaders in Wisconsin by WMEP Manufacturing Solutions had two main findings.

First, the economic fallout from the coronavirus is not spread evenly across the manufacturing sector.

Second, manufacturers are prioritizing keeping their workforce intact during the economic downturn.

“Companies are really working hard recognizing that employees are a strategic resource and that we are in a long-term tight labor market,” said George Bureau, vice president of consulting services at WMEP, during a webinar to discuss the survey results.

The WMEP survey was conducted April 21 to April 27 and included responses from 147 companies in the state. A plurality of the respondents, 48%, came from the Milwaukee 7 region with another 22% in the MadRep region around Madison and 18% from The New North in the northeast part of the state.

Nearly two-thirds of the responses came from companies with less than 100 employees. Another 21% of the responses were from firms with 101 to 250 employees and 8% each from firms with 251 to 500 and more than 500 employees.

More than three-quarters of respondents said their business is down compared to normal for this time of the year, including 37% saying their business is down more than 30%, another 27% saying their business is down 10% to 30% and 13% saying their business is down less than 10%.

Just 12% of survey respondents said business was up at all.

Asked to describe the current state of their business, those in chemicals and rubber manufacturing industries were generally more positive. Those in metal, electronics and fabricated metal had the worst outlook.

“The impact by vertical has not been uniform,” Bureau said.

Looking at order backlogs, 46% of respondents said their backlogs had decreased more than 10% in the last 30 days and another 16% said backlogs had decreased up to 10%.

Around 16% of respondents have seen backlogs increase, including 10% of respondents with more than a 10% increase.

“There are manufacturers out there who see a significant increase in business activity as well as their backlog,” Bureau said.

He added that the unevenness of the downturn across industry and geography – the western part of the state seemed to fair better than the eastern – was among the surprises in the survey for him.

Bureau also said he was somewhat surprised with employers prioritizing their workforce as they look to cut costs.

Asked what responses they had already taken, 64% of respondents said they have deferred capital expenses while 60% said they had cut non-labor expenses. Just 46% had reduced working hours and 31% had instituted unpaid time off or furloughs.

Asked about the likelihood of their future actions, respondents followed a similar pattern, rating deferred capital spending and cuts to non-labor expenses as the most likely. Unpaid time off and furloughs were the least likely action.

“I think this is a way of recognizing indirectly that the labor market from a macro perspective will stay tight for some time and that’s just due to the demographic shifts in age and available workers that we have and again that the tight labor market will reappear and I think manufacturers are recognizing that in their actions,” Bureau said.

Manufacturers have struggled in recent years to attract workers amidst an increasingly tightening labor market. They have also been confronted with retirements amongst long-tenured employees. As of mid-2019, around 27.3% of manufacturing workers in Wisconsin were over 55, compared to 24% of workers across all industries, according to U.S. Census data.

The sector also lags the rest of the state on younger workers with 8.3% of the industry’s workers between 19 and 24, compared to 11.4% in all industries in Wisconsin.

Bureau said manufacturers have a chance to tout the stability and potential career growth of their sector during the economic downturn from the coronavirus.

“I think this is a golden opportunity,” he said. “Now, we have a difficult time for manufacturers. God bless that we’re not in the service industry, this would be a more difficult call.”

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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