Manufacturing Industry Optimistic Despite Market Challenges According to Study
This study conducted by Harbour Results Inc. in February 2023 collected feedback from approximately 320 manufacturing facilities.
Harbour Results Inc. (HRI) released results from its Harbour IQ Manufacturing Pulse Study, which indicated 92% of respondents were profitable in 2022 with an average EBIT (earnings before interest and taxes) of 9%. On average, respondents expect a 2.6% increase in revenue from 2022-2023. However, the data also showed a drop in capacity utilization from Q3 2022 to Q1 2023 across all manufacturing processes.
The study, which is done three times a year to understand the health of North American manufacturing and identify trends, was conducted in February 2023 with approximately 320 manufacturing facilities participating. As part of the study, HRI developed the HIQ Manufacturing Pulse Index, a statistical analysis of a variety of metrics collected as part of the survey, to measure the overall expansion or contraction of the industry. For this study, the overall Manufacturing Index is 64 (out of 100).
The study shows that the tool and die industry is facing a number of challenges in 2023, including the growing cost of doing business, increased outsourcing of tools and vehicle launch delays that are impacting new tool sourcing. According to Laurie Harbour, HRI president and CEO, the industry is expected to pick back up later in 2023 into 2024 and 2025 based on forecasts about the auto industry.
According to the study, both plastic processors and die casters expect to see growth in 2023 in profit and revenue. In addition, plastic processors and die casters have a large amount of manufacturers expecting to hire in 2023, and a majority of the manufacturers in these two industries are seeing an increase in business quoting activity. The study notes OEMs in die casting may see some challenges in 2023 because of the lack of production suppliers and strain on other aspects.
Metal formers are expecting 2023 to be similar to 2022. Over half of the respondents are predicting to see no change in EBIT. Like plastics processors and die casters, over half of respondents are expecting to hire in 2023. Quoting levels are said to be about the same as 2022’s levels.
The next Manufacturing Pulse Study will be conducted in May 2023, along with HRI’s annual Benchmarking Study. The company encourages all manufacturers to participate.
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