Wisconsin manufacturers are bullish

More than three-fourths of the manufacturing executives responding to The Paranet Group’s Mid-Year Survey are forecasting increases in sales at their companies, amplifying several other recent indicators that the economic recovery is gaining steam.

More than 100 manufacturing executives, most of whom are based in Wisconsin or Illinois, responded to the survey by The Paranet Group, which is a Milwaukee-based development organization for manufacturing executives.

Seventy-seven percent of the respondents are forecasting increases in sales at their companies in the final six months of the year. That is up from the 56 percent who forecasted increases in sales at the start of the year.

“There are several good things that respondents listed as having a positive impact on their business this year. The overall list centers around high morale, seeing results from hard work, dedication and a slow but upward economic trend,” said Linda Kiedrowski, chief executive officer of The Paranet Group.

Kiedrowski listed the following nine factors that are fueling sales growth in the past six months:

1. Expansion of new business from existing and new customers.
2. New talent with great ideas.
3. New products with improved margins.
4. New marketing methods identified through technology.
5. Workers becoming more dedicated and customer-oriented.
6. Hungry new hires willing to work hard and take on new initiatives.
7. Attention to training reaping positive fruit.
8. A slow but steady pickup in the economy.
9. Sustainability in Lean and team initiatives.

According to the survey, nearly 56 percent of the respondents expect to hire more hourly workers over the next six months. Another 38 percent plan to maintain their current staffing levels, while just 7.5 percent plan to decrease staff.

The survey echoed surveys and analysis in the recent BizTimes Mid-Year Economic Forecast, which also projected increases in corporate sales, profits and hiring in the second half of the year.

The Paranet survey also documented some of the challenges facing manufacturers.

“Manufacturers are feeling overwhelmed in general. They are learning to live in a faster paced global economy requiring more technology and skilled employees. Manufacturers are cautious about things that will affect their bottom line from a cost standpoint. Increasing headcount, new capital equipment and making time for process improvements are tough decisions,” Kiedrowski said.

Kiedrowski said respondents identified 11 key challenges facing manufacturers:

1. Employee health care benefits.
2. Economic and seasonal swings are no longer cyclical.
3. Government-Not enough or too much.
4. Mother Nature.
5. Cost of raw materials, component parts, freight, utilities.
6. Stagnant economy (U.S. and global).
7. Lack of skilled and experienced staff.
8. Tedious process of hiring.
9. Reduction in suppliers.
10. Poor quality.
11. Margin erosion.

The survey also indicated that the vast majority (69 percent) made no changes to their employee health care benefit plans in the first six months, with just 9 percent reporting that they had to increase their employees’ contributions or deductibles.

Steve Jagler is executive editor of BizTimes.