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Ten Trends Shaping U.S. Manufacturing in the Next Twelve Months

Forty CEOs of large manufacturing companies shared their perspectives at the end of June 2020 on the trajectory of the economy, the sector, and their businesses during the next year.  Areas of relative confidence and uncertainty are reflected in three major themes: diverging outlooks on the economy and industry, shifts to business models and operations and evolving workplace dynamics.

The top trends are:

Diverging outlooks on the economy and industry

  • Demand only recovers with vaccine – aggregate demand will not return to pre-pandemic levels without it, and nearly 4 in 5 CEOs do not expect a V-recovery of U.S. GDP by June 2021.
  • China decoupling accelerates – companies will continue to shift locations of operations and China growth will stay below 6%
  • Manufacturing output at stake in election – November ballots will matter for manufacturing production, say 81% of CEOs.
  • Elevating cybersecurity and ESG – resources for IT/OT cybersecurity will rise and reporting on ESG becomes table stakes.

CEOs foresee shifts to their business models and operations

  • Onshoring operations globally – consensus is to see more supply chains and production capacity move in-country.
  • Reconfiguring factory floor and footprint – shopfloors will see permanent design changes for safety, as physical footprints also shrink for some global operations.
  • Smart manufacturing sees momentum – annual investment is expected to rise at 85% of companies.
  • Digital innovation drives sales – digitalization of distribution will fuel growth for two-thirds of CEOs.

CEOs expect workplace dynamics to evolve in their companies

  • Committing to diversity & inclusion – nearly 90% of CEOs will hold more forums to encourage dialogue on D&I, with a smaller share likely to raise targets for hiring and promotion of underrepresented groups.
  • Work environment still in flux – little consensus on the “new normal” for travel, telework, and workspace.

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