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EXECUTIVE SUMMARY
Manufacturing Economic Predictions for 2023
American manufacturers have been wrestling with extensive challenges. Fear of another recession and concern about the debt ceiling cast a shadow on the economy, complicating facility planning.
In the meantime, attracting and retaining a quality workforce continues to challenge the industry due to the tight labor market. Technology solutions such as Sage X3 can help manufacturers with inventory management, procurement, cloud computing, and cybersecurity. Sage X3 is an example of a platform designed to help manufacturers operate more efficiently and effectively in these unique times via several distinct strengths.
Manufacturing Economic Predictions for 2023
With ongoing conversations about another recession and fears around the 2023 debt ceiling and its implications, planning for the future of your manufacturing facility is vital. Chad Moutray and Rob Sinfield shared their predictions for economic outlooks for 2023 and how technology will be an integral part of your manufacturing business this year and beyond.
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Context
Manufacturing experts Chad Moutray and Rob Sinfield shared their economic outlooks for 2023. They explored the current state of the economy, made predictions for the manufacturing sector, and explained how technology could help manufacturers manage more effectively during these turbulent times.
Key Takeaways
America's employment situation carries positive signs for the economy, along with challenges for manufacturers.
The American labor market shows growth along with complications for manufacturers. Historically low unemployment makes a recession less likely but the tight labor market can leave factories shorthanded.
Workforce Challenges
COVID Impact
Hiring & Retention
Workforce Challenges
Strong labor data is not necessarily good news for manufacturers that are struggling to hire. Attracting and retaining a quality workforce was recently identified as the foremost challenge confronting NAM members.
Workforce Challenges
COVID Impact
Hiring & Retention
COVID Impact
Many workers who lost jobs during COVID have remained on the sidelines. Childcare costs often prevent parents from joining the workforce, and young men, in particular, are rejecting the traditional labor market—opting for the greater work/life balance of the gig economy.
Workforce Challenges
COVID Impact
Hiring & Retention
Hiring & Retention
Retention has proven nearly as burdensome as hiring. More than four million Americans quit their jobs in December—a level of churn that makes training difficult.
Nonetheless, the nation currently boasts almost 13 million manufacturing workers and nearly 400,000 jobs were added in the last year, marking the best hiring year since 1994. With solid wage growth in the sector and the labor markets expected to loosen, staffing and production will grow.
A large part of the challenge is finding workers. Everyone I talk to across manufacturing sectors is having trouble hiring, with many really scrambling for talent and raising wages several times in the last couple of years.
Chad Moutray, NAM
Persistent inflation and aggressive monetary policies will limit America’s GDP growth in the short term but keep the prospect of a soft landing in play.
Increasing wages in the manufacturing sector have been weakened by relentless inflation. The Fed has enacted aggressive monetary policies and swiftly increased its federal funds rate.
Consumer prices continue to grow at 6% annually.
The Federal Reserve has set a target of 2%.
This time last year, the rate was effectively 0%.
Today, it stands at 4.75% and is likely to climb even higher.
More costly borrowing drags on the economy but the need for higher interest rates will not relent until inflation is harnessed and the labor market cools. Despite some progress on inflation, consumer levels remain high—especially in housing, transportation, and food. As a result, Fed rates likely will not drop until sometime in 2024 and GDP growth will continue to dwindle. However, even minimal GDP growth is still far preferable to economic contraction and keeps the nation out of recession.
Positive economic developments from key international trading partners promise to bolster America's manufacturing sector.
Though experts anticipate a manufacturing industry recession, recent encouraging data and a historical perspective suggest a strong recovery may follow.
Technology solutions can empower manufacturers to better navigate today’s unique economic challenges while remaining agile to meet tomorrow’s demands.
Many of the same market factors impacting the global economy affect manufacturing and distribution operations. This is especially true of supply chain issues and modern workforce demands. Optimal technology enables manufacturers to thrive through a downturn by supplying flexible, intuitive solutions. Sage X3 is an example of a platform designed to help manufacturers operate more efficiently and effectively in these unique times via several distinct strengths:
Inventory management
Companies lacking confidence in supplies and deliveries are holding more inventory and keeping more cash on hand. Accurately tracking these assets helps control costs, drives informed decisions and can automate purchasing to match market conditions.
Intelligent procurement
Software is evolving by incorporating AI and algorithmic automation. By analyzing inventory data and buying trends, platforms are learning to generate purchasing proposals. They will soon consider more than price and delivery, expanding to include quality, carbon impacts, and other variables to generate a four-dimensional procurement model rather than a two-dimensional matrix.
Cloud computing
Enterprise resources like Sage X3 employ cloud computing and are cost-effective, integrating with remote manufacturing operations. This convenience helps with recruitment and retention.
Cybersecurity / data protection
Like all modern businesses, manufacturers must guard against cybersecurity threats. As custodians, they also must safeguard customer data. As various jurisdictions enact local data privacy protections, a platform compatible with all regulations will be crucial to compliance.
The right technology can help manufacturers knock down internal barriers and thrive through the delivery of intuitive solutions tailored to their unique requirements.
Rob Sinfield, Sage
Additional Resources
Manufacturing Economic Predictions for 2023
Manufacturing experts Chad Moutray and Rob Sinfield shared their economic outlooks for 2023. They explored the current state of the economy, made predictions for the manufacturing sector, and explained how technology could help manufacturers manage more effectively during these turbulent times.
Manufacturing Economic Predictions for 2023
With ongoing conversations about another recession and fears around the 2023 debt ceiling and its implications, planning for the future of your manufacturing facility is vital. Chad Moutray and Rob Sinfield shared their predictions for economic outlooks for 2023 and how technology will be an integral part of your manufacturing business this year and beyond.
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With over 20 years of industry-dedicated expertise in providing tailored ERP for manufacturers and distributors, Sage X3 delivers outstanding end-to-end software that is flexible, customizable, and scalable to meet your business needs whether in US or all over the globe. From production management, to supply chain, and financial management, Sage X3 is a product that is made for your industry.
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