First Business Bank is proud to sponsor the Wisconsin Manufacturing Report™ again in 2022. The report was started last year and commissioned by the Wisconsin Center for Manufacturing Productivity (WMCP) in collaboration with WMEP Manufacturing Solutions and the University of Wisconsin – Stout’s Manufacturing Outreach Center. In this second year, the data is even more interesting and valuable as we now have the prior year from which to draw some comparisons.
As would be expected, some of the results mirror the responses we received in 2021, but there are some noticeable changes that highlight manufacturers’ perspectives on the state of manufacturing in Wisconsin. Access the full report for detailed results.
Economic Impacts on Manufacturing Increasing
Most of the data in the report was gathered in the middle of the third quarter this year prior to the most significant market correction and ongoing Fed rate increases. Still, the results clearly confirm that Wisconsin’s manufacturers were seeing the storm clouds forming. Although most surveyed remain confident in their own company’s financial outlook, economic factors beyond their control are causing leaders to be less optimistic about the growth and overall health of manufacturing in the state. Many who participated in the interviews expressed concerns that they expected reductions in year-over-year increases in some key metrics, such as profitability, gross sales, and capital expenditures. At the same time, they had the foresight to identify revenue growth and ongoing productivity improvements as some of the keys to success for 2022.
Growing Concern About Raising Prices, Capital Investment
Given that many Wisconsin manufacturers have a strategic plan, it’s clear they are investing a great deal of thought into what leaders see as the keys to future success and tools to help them navigate these complex economic times. As previously mentioned, some of the most significant challenges of 2021 didn’t magically disappear and others have reared their ugly heads and moved up in the rankings of importance. The obvious shortage of talent, along with some very dramatic increases in supply chain difficulties and price increases, caused many survey participants to cite that raising prices have now become one of their major challenges and was the biggest mover on the list of challenges. How much longer they expect these challenges to exist, and what direction they might go, has significant impact on strategic planning and even how long a plan might be valid.
Capital investment also is an interesting part of Wisconsin manufacturers’ current thinking. Many of the aforementioned challenges have caused leaders to make tough decisions about uses of capital. Some examples of these decisions include: investing in more inventory to mitigate supply chain and price concerns or deploying cash resources into longer-term assets like robots and other technology.
The numeric results of this year’s report provide valuable insight into what’s on the minds of Wisconsin’s manufacturing leaders, but, more importantly, they illustrate the great insight, direction, and impact that our manufacturers bring to Wisconsin.