"We should all be concerned about the future because we will have to spend the rest of our lives there." -- Charles F. Kettering

As American industry claws its way out of the worst financial crisis since the Great Depression, concern about the future does indeed weigh on the minds of manufacturing leaders. In their responses to the "Future of Manufacturing 2009" survey, conducted by IndustryWeek and Crowe Horwath, a public accounting and consulting firm, they identified a wide range of issues that are keeping them up at night, as well as strategies they are employing to grow their businesses in the face of intense global competition and the uncertainties presented by proposed changes in health care, environmental regulation and other policy issues.

Looking at market pressures facing them currently, manufacturing leaders identified competition from low-cost countries, cost of health care and cost of raw materials as their top concerns, and they predict those same issues will continue to be their foremost concerns three years from now. While attracting/keeping skilled labor was the third-ranked concern ahead of health care in last year's study, it fell to fourth (26%) this year, a reflection of the poor job market. However, respondents don't see an abundant labor supply lasting as 37% said it would be a top concern three years from now.

Managing credit market/working capital pressures were a clear concern, rising to a tie for fourth place (26%) this year. Only 8% of respondents said it would be a significant market pressure three years from now, signaling optimism that in the long run, credit markets and profitability would return. Other major shifts identified were in taxes, regulations and environmental compliance, as manufacturers worry about who will pick up the tab in the future for the stimulus plan, the effects of new financial regulations and the cost of efforts to combat global warming.

Top market pressures vary by firm size. While 57% of respondents from firms with less than $25 million in revenue said health-care costs are their No. 1 concern, that was the case with only 29% of those at companies with $1 billion or more in annual revenue. At both large and mid-cap firms, the cost of raw materials was the chief concern of our respondents. Perhaps reflecting their sensitivity to global competition, 27% of respondents in larger firms said they were concerned about time to market for new products, compared with 9% at smaller firms.

Growth Opportunities

We asked IW readers where they see the biggest growth opportunities for manufacturers and how their company is preparing to take advantage of these opportunities.

View article on one page