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Uncertainty in Washington, Healthcare Costs, Skills Gap are Top Challenges for Manufacturers, According to New Plante Moran Industry Outlook

​Southfield, Michigan, March 1, 2013 – Lingering challenges may limit a significant rise in manufacturing for 2013, but the long-term outlook for the industry is promising, according to Plante Moran’s 2013 Manufacturing Outlook.

Plante Moran, one of the nation’s largest certified public accounting and business advisory firms, has released an industry outlook report that comments on some of the key challenges manufacturers will face in 2013, including regulatory and legislative uncertainty, the effects of changes in health care legislation, continued rationalization of international supply chains, and the skills gap.

“Despite a promising first and second quarter in  2012, growth rates in the industry were hampered throughout the year,” said Chris Montague, leader of Plante Moran’s manufacturing industry group.  “The fiscal cliff, changes in health care, economic decline in Europe, uncertainty over tax rates and new federal regulations caused many U.S. manufacturers to delay making investments in new equipment, systems and talent.  While many of these issues will spill over into 2013, we do see growth in the sector over the next five years.”

Montague notes while there are challenges ahead, there is also opportunity.  The outlook recommends manufacturers focus on:

  • Perfecting innovation efforts to differentiate their business and gain a competitive edge.  Studies show that innovation can enhance and extend a company’s product line as well as cut costs.
  • Taking a comprehensive look at regulations, tax rates and policies and developing a comprehensive plan.
  • Understanding health care reform and recognizing how it affects the entire value chain.  This is a time to assess health care benefits and look for the best options for both the company and its employees.
  • Making wise choices about international operations.  Manufacturers should recognize that single region processing footprints are out of favor and rationalization of footprint by region is now the norm.

The outlook provides insight from Jeffrey Immelt, General Electric Co. chairman and CEO, and Pedro Guillen, contributor to the World Industrial Reporter and managing partner at Kinetik Partners.  Immelt discusses how middle market manufacturers can keep the U.S. competitive, while Guillen talks about the importance of nurturing and developing an innovation ecosystem.

The paper cites and analyzes statistics provided by several organizations, including the Manufacturers Alliance for Productivity and Innovation and the National Center for the Middle Market at The Ohio State University. It also reflects on data uncovered in the 2012 Plante Moran Innovation Quotient Survey.

“Since the end of the recent recession, manufacturing has been among the major drivers of growth in the United States, and it was perhaps the first to accept what it means to operate in the new normal,” Montague said. “This willingness and ability to adapt to change will make all the difference as we look forward.”

To read the full outlook, visit http://www.plantemoran.com/perspectives/outlooks/Documents/Manufacturing-Outlook.pdf  

About Plante Moran

Plante Moran is among the nation’s largest certified public accounting and business advisory firms, providing clients with tax, audit, risk management, financial, technology, business consulting and wealth management services.  Plante Moran has a staff of more than 2,000 professionals in 21 offices throughout Michigan, Ohio, and Illinois, with international offices in Shanghai, China; Monterrey, Mexico; and Mumbai, India.  Plante Moran has been recognized by a number of organizations, including FORTUNE magazine, as one of the country’s best places to work. For more information, visit plantemoran.com.

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