Survey shows some recovery in manufacturing, but it’s focused at larger firms

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Last updated on June 4th, 2020 at 02:00 pm

More than three-quarters of manufacturers surveyed by WMEP Manufacturing Solutions say their business is down during the coronavirus pandemic compared to normal levels.

At 77% in May, the number experiencing declines was unchanged from WMEP’s first survey in April. There was however, a shift toward smaller declines. In April, 37% said their business was down more than 30% compared to 31% in May.

Responses on order backlog trends also pointed to some improvement. In April, 46% of respondents said their backlog was down more than 10% in the last 30 days. That figure dropped to 39% in the most recent survey. There was also an increase from 6% to 16% in respondents seeing an increase of up to 10% in backlog.

“We’re certainly seeing manufacturing is down … but maybe not down as much from a trend perspective,” said George Bureau, vice president of consulting at WMEP.

The May survey results also showed most of the improvement was concentrated at larger firms with more than 250 employees while those with 21 to 100 employees saw a slight downtick in business performance.

“There’s little evidence right now of recovery for the smallest companies,” Bureau said.

The differences based on company size carried over to questions on business outlook. Firms with more than 500 employees saw an improvement from April. Those larger firms were actually likely to say the outlook was at least somewhat positive.

Businesses with 250 to 500 employees also had a more positive outlook than April, but were still generally pessimistic. Smaller firms saw little change in their outlook.

Overall, the survey found 52% of respondents had a somewhat or very positive outlook for their business, up from 41% in April.

While the improvement is a step in the right direction, it is a long way from the 89% with a somewhat or very positive outlook in a pre-coronavirus first quarter survey by the National Association of Manufacturers.

“We’re going the right direction, but how far do we have to go?” Bureau said, adding that the survey data doesn’t show the challenges individual companies face. “There are some people out there that are really hurting on a company basis.”

In the last two weeks, a number of manufacturers have notified state officials of job cuts tied to COVID-19.

BRP, the parent company of Evinrude, said it would stop outboard engine and instead focus on boats. The company originally said it would cut 387 jobs in Sturtevant as a result but has since revised that figure to 363.

Sheboygan-based sock maker Wigwam Mills said it would cut 121 jobs amid uncertainty about the retail environment moving forward. The company plans to continue some production in Sheboygan put will also work with other manufacturers to make its products in the U.S.

On Monday, Renaissance Manufacturing Group said it would close its Waukesha foundry after selling its book of business as demand for heavy truck parts has been in an extended downswing. Grede, the buyer, plans to relocate the work done at the facility to plants in Wisconsin and North Carolina. RMG will continue to operate its facilities in Grafton and Alabama.

Bureau said the question moving forward will be whether recovery continues to be slow or will accelerate. Bureau noted that in working with WMEP clients, it seems conditions are actually improving and the improved survey results are not just the result of lifted state restrictions.

“It’s not busy work, but it’s actual demand,” he said. “We’ve seen a small uplift for a number of people.”

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Arthur Thomas
Arthur covers manufacturing for 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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