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CEOs Report Disruptions Are Easing a Bit

CEO Outlook: January 2024

There were no big surprises in our latest CEO Outlook that wrapped up 2023 and brought us into 2024. The top areas of interest for our manufacturing CEOs from mid-to-large companies include general economic and global market volatility, talent recruitment and retention for professional positions, and cyber threats. Hourly shopfloor talent recruitment has now fallen off the top five concerns. Moving into the top 10 list of manufacturers’ concerns is domestic policy instability and the inability to enact needed public policies. It was a year of resetting expectations, but what will the remainder of 2024 bring?

Top 5 Hot Topics for CEOs

(Parentheses reflect changes in rank from Q2 2023)

Better Future Ahead?

Manufacturers are seeing a brighter future on the horizon for 2024. 57% of manufacturers surveyed are not forecasting any business downturn. Only 10% are expecting a downturn in the second half of 2024. This is starkly different from March of 2023, where 80% of respondents expected a downturn. The promise of economic stability, if not more, is also seconded by the nearly 463 million square feet of industrial space under construction.  

2024 Business Forecasts Look Brighter

Manufacturers plan to keep pace with their order trends. 43% of CEOs expect little change in new orders for H1 2024, but there is less confidence that exports will keep that same maintenance trend, as 41% of respondents are expecting a measurable decrease. As for prices in 2024, 80% of respondents expect pricing to remain the same or even decrease for raw materials and components.

Company Outlook on Orders for H1 2024 Compared to H1 2023

Company Outlook on Components and Raw Materials Prices for 2024

The Politics of Things

Domestically and globally, there is a lot of attention to what is happening in politics. Manufacturing has stayed front and center with the flurry of PFAS lawsuits, new cybersecurity reporting laws, FLSA requirements and more. The industry drives forward with innovation, from government support in reshoring electronics across North America and proposed tax credits to renewable energy and battery storage projects.

When considering the possibility of Taiwan and China reunification, a majority of manufacturers are restructuring their sourcing away from Chinese products or regions, or actively considering it. Commercial, trade, and political issues specific to China is a mid-level concern right now despite it falling two spots from seventh to ninth from our CEO Outlook of Q2 2023.

Many Are Expecting to Reduce Reliance on China

What Is Going on with Supply Chains?

Supply chain disruption sits as number four on the hot topic list for respondents. What’s the concern? Labor shortages and geopolitical tensions are bogging manufacturers down. Long-term effects from COVID shutdowns, the war in Ukraine, the situation in Gaza and tension in Taiwan have taken a toll.

Factors Still Impacting the Supply Chain

Despite the above concerns on what is impacting supply chains, all survey respondents indicated that supply chain health is rising, with a fairly even split between fully recovered and improving but still facing some disruption.  

Want More?

If you want to look at more solutions to mitigating disruptions, available on demand is our Freight Outlook 2024 & Nearshoring’s Impact on Logistics in Mexico, covering the trends and analysis on how nearshoring in Mexico would have a role in global supply chain.