March 30, 2022
Manufacturing & Distribution Services Group
The results are in from the 2022 Indiana Manufacturing Survey: Back to Work. They reveal that while the COVID-19 pandemic remains part of operational planning for manufacturers, the industry is now focused on finding solutions to surging customer demand, high supply chain costs, recruitment and retention, and implementation of automation tactics.
Conducted by Katz, Sapper & Miller in partnership with Indiana University’s Kelley School of Business at IUPUI and the Indiana Manufacturers Association, nearly 100 Indiana-based manufacturing companies were surveyed through the first quarter of 2022 on their overall successes and challenges during the COVID-19 pandemic and their expectations going forward.
In 2020, manufacturers had to adjust practices to both maintain profit margins and ensure they were providing a healthy, safe environment for employees. Survey respondents say this year that COVID-19 is either not a significant threat (53%) to their business, or it’s a serious impact that they feel they’ll be able to make it through (47%). Furthermore, most have been able to maintain or improve overall profit margins, with an average improvement of about 9% expected for 2022 over 2021.
Despite these optimistic tones, new challenges have arrived. Forty-five percent of this year’s respondents experienced a surge in customer demand, coupled with 81% of respondents dealing with supply chain shortages. Related, recruitment and retention of workers was a major challenge before the pandemic, but it has since been exacerbated. Respondents report an average increase of 17% in labor costs. And, in an effort to attract skilled workers due to worker shortages, 93% of survey participants are raising salary levels and adjusting benefits. Another 73% say the lack of workers is accelerating the need for automation, a trend that’s long been on the rise.
The survey, now in its 15th year, is focused this year on shifts in financial planning, revised workforce development efforts, and other operational areas directly affected by the pandemic.