Are better projections expected in the industry to end the year? Our manufacturing CEOs were split. While 25% predict business expansion in Q4 2024, 38% expect no changes, and the other 38% are preparing for contraction.
As of October 2024, the number one concern for manufacturing CEOs is the global economic and market volatility, followed by cyber threats, and commodity and raw material prices, each having kept their spot as top three concerns since June 2024. Newly, and to no surprise this time of year, domestic political instability/inability to enact needed public policies rose up from seventh to fourth place, followed by commercial, trade, and political issues specific to China.
Hot Topics Manufacturing CEOs are Watching in the Remainder of 2024
(Parentheses reflect changes in rank from Q2 2024)
Source: Manufacturers Alliance CEO survey, 2024.
Getting Through the Remainder of 2024
CEOs have better hopes for 2025, with 63% expecting business expansion. KPMG also reports continued growth, as 78% of their CEO respondents have growth expectations for the next three years. These expectations are greater than Q4 2024 predictions, where only 25% of our respondents felt there would be business growth, and about three-fourths weren’t expecting any outlook changes or a business contraction.
Company Outlook for 2025 Compared to 2024
Source: Manufacturers Alliance CEO survey, 2024.
This split was noticeable among new order predictions as well, where just under a third are expecting higher new orders, and fewer than 20% expecting higher export orders, which is lower than in the first half of the year. In Q4, the majority expect the order outlook to be the same. Many respondents expect component and raw material prices to stay the same or decrease in Q4 2024 compared to Q1-Q3 2024.
Company Outlook on Orders for Q4 2024 Compared to Q2 2024
Source: Manufacturers Alliance CEO surveys, 2024.
There is nearly an exact split on capital investment outlooks, with about one-third of manufacturing CEOs predicting an increase, decrease, and continuation of the same capital investments for 2025, and nearly half will wait on any major capital expenditures until after the 2024 U.S. presidential election. More than half are targeting investments in infrastructure and facilities with an increased budget of 10%, the largest of all investments. Technology and automation are second in overall investment increase, with 72% going beyond their 2024 spend by more than 6%.
Expected Increment in Capital Investments for the Next 12 Months
Source: Manufacturers Alliance CEO survey, 2024.
If a manufacturer was going to decrease their capital investment, infrastructure and facilities are the first to go, with 70% planning on decreasing spending by at least 6%, and some manufacturers predict a decrease in spending by more than 10%. Overall, the decreases in capital investment into categories like supply chain, training, technology, sustainability, and research and development are expected to be 5% or less.
Expected Decreases in Capital Investment
Source: Manufacturers Alliance CEO survey, 2024.
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