Summer is time for a refresh, and we saw just that in the results of our latest CEO outlook in June 2024. While the top subject of interest for our manufacturing CEOs from mid-cap to large-cap companies remains general economic and global market volatility, cyber threats moved up one to the second spot, and commodity and raw material prices rose to third (up from sixth place). Commercial, trade, and political issues specific to China rose to the fourth area of interest, general global supply chain disruptions fell from fourth to fifth and notably talent recruitment and retention for professional positions has fallen to sixth (previously second).
Hot Topics that Manufacturing CEOs are Watching for the Remainder of 2024
(Parentheses reflect changes in rank from Q1 2024)
(Source: Manufacturers Alliance CEO Survey, June 2024)
How Are Manufacturers Feeling About the Second Half of 2024?
More than half of manufacturers surveyed are expecting capital investments to stay the same for the next twelve months, although almost a third are expecting investments to increase. Infrastructure and facilities hold the top slot for capital investment, with 44% expecting investments to be more than 10%. Technology and automation are close behind, with 33% expecting investments to also be more than 10%, and another 44% are projecting investments within 6-10%. Supply chain optimization and sustainability initiatives show a different tale. Eighty-eight percent and 86% respectively are expecting a mere 1-5% investment increase in comparison to the new buildings and the new technology.
Expected Increment in Capital Investments for the Next 12 Months
(Source: Manufacturers Alliance CEO Survey, June 2024)
The Industry is Watching the Horizon
Manufacturers are prepared to mitigate risks. Implementing contingency plans and risk management strategies as well as diversifying supplier bases across multiple regions are the current go-to strategies as manufacturers are still looking out for geopolitical tensions and potential supply chain disruptions.
Top 6 Ways Manufacturers Are Mitigating Risks Amid Geopolitical Tensions
(Source: Manufacturers Alliance CEO Survey, June 2024)
Building Up Outlooks
Manufacturers are supporting those capital investments as orders remain steady or even increase. Nearly all respondents project that they will be at least at the same order level in the remainder of the year compared to the first half of 2024. And the bulk of manufacturers estimate that raw materials and components prices will stay the same in 2024.
Company Outlook on Orders for H2 2024 Compared to H1 2024
(Source: Manufacturers Alliance CEO Survey, June 2024)
Company Outlook on Components and Raw Materials Prices for 2024
(Source: Manufacturers Alliance CEO Survey, June 2024)
There is no major incentive to build back up inventory based on the above, so slightly over half of those surveyed are expecting inventory levels to stay the same, and about one-third even are looking towards a decrease in inventory level. But capacity is on the rise. Thirty-nine percent are planning to see a higher percentage of capacity utilized in H2 2024 compared to H1 2024.
Company Outlook on Inventory Levels and Capacity Utilization for H2 2024 Compared to H1 2024.
(Source: Manufacturers Alliance CEO Survey, June 2024)
Want More?
Concerns brought up to management always start somewhere. Check out our Economic Indicators dashboard for a grouping of the top indicators in economics, production, and talent that manufacturers care most about.
