Demand and Optimism Are Rising, So It's Time to Fix the Leaks in Your Bucket
Key Highlights
- Nearly 70% of manufacturers expect sales growth in 2027, but many may have enough unused capacity to meet rising demand without hiring.
- Manufacturers should eliminate operational waste, improve changeovers and reduce downtime before investing in additional labor or capacity.
- Targeted automation, smarter use of data and equipment upgrades can boost productivity, improve pricing power and offset rising costs.
A survey of more than 340 manufacturing facilities shows a growing sense of optimism about growth in 2027, with one in five companies expecting sales to climb at least 10% and more than two-thirds planning to add employees.
Responding to the latest quarterly report from consulting firm Wipfli, roughly two-thirds of manufacturing leaders are forecasting top-line growth over the next 12 months. That’s up from less than 60% in July and includes a higher share of respondents expecting double-digit sales increases.
Lori Harbour, a partner at Wipfli, said she’s upbeat about the environment for manufacturers and their opportunities to capitalize on the momentum that’s been steadily gathering steam throughout 2026. That view is shared by Oxford Economics’ Sara Godfrey, who earlier this month wrote that the industrial recovery continues to broaden and looks likely to do so well into 2027 as companies rebuild run-down stocks.
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dreamstime_xxl_15507828“With inventories as lean as they are, any increase in demand via higher new orders should quickly bleed into higher production activity,” Godfrey said, adding that data points support the view that “the restocking cycle is already underway.”
That has leaders looking for labor: 70% of leaders told Wipfli they expect to hire people next year to either fill openings or support growth. Harbour has a question for many of those leaders and others thinking they should staff up in the coming months: Do you really need to?
Wipfli’s July report showed that many manufacturers’ capacity utilization is only about 60%. And while the average respondent to its surveys thinks that figure can rise several percentage points, Harbour said it’s still too low and rarely justifies bringing on more people. As Harbour sees it, many organizations that understandably retained talent in recent years even if customer demand wasn’t growing apace have lost some of their discipline and operational rigor.
Pandemic-era creativity and workarounds, she said, have largely faded and many companies have—maybe because they have extra capacity—slipped in terms of cleanliness, changeovers and downtime.
“They’ve let waste creep back in,” she said. “I feel like we have such short memories, for both the good times and the bad times. I don’t know how many times I’ve said, ‘Are we going to learn something?’”
Harbour says a sharper focus on the quality of a business’ performance—in terms of new business coming in, the profits being produced and the health of the balance sheet—can help set leaders back on the right path. Steps to take, she said, include basic blocking and tackling (including making smarter use of data) to fix “leaks in the bucket” as well as making targeted investments in automation and new equipment so as to not fall behind the market.
Making good moves on those fronts can profitably lift capacity utilization and give companies a stronger leg to stand on in terms of pricing. Keeping up with rising costs has been a challenge for many manufacturers for several years now and the Wipfli quarterly report showed that discomfort is growing: Only 29% of responded said they had successfully passed through most of their requested price increases this year.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has been in business journalism since the mid-1990s and writes about public companies, markets and economic trends for Endeavor Business Media publications, focusing on IndustryWeek, FleetOwner, Oil & Gas Journal, T&D World and Healthcare Innovation. He also curates the twice-monthly Market Moves Strategy newsletter that showcases Endeavor stories on strategy, leadership and investment and contributes to other Market Moves newsletters.
With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati in 1997, initially covering retail and the courts before shifting to banking, insurance and investing. He later was managing editor and editor of the Nashville Business Journal before being named editor of the Nashville Post in early 2008. He led a team that helped grow the Post's online traffic more than fivefold before joining Endeavor in September 2021.
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