Manufacturers are showing signs of improvement under the latest COVID/Economic Crisis Manufacturer Pulse Survey conducted by WMEP Manufacturing Solutions.
WMEP has released the results of its third survey of Wisconsin manufacturers since the start of the coronavirus pandemic. The survey’s aim is to assess how companies in the industrial sector are responding to Covid-19 and the related economic crisis.
The latest survey reveals that the state’s manufacturers are exhibiting signs of progress in rebounding from the challenges tied to the pandemic when compared with survey responses from April and May.
In the August survey, 67% of the 123 manufacturers that responded to the survey indicate that their business was down “greatly,” “significantly” or “somewhat,” compared with 77% in May when comparing their current state of business to where it stood under normal circumstances.
“This suggests improvement,” WMEP Vice President of Consulting Services George Bureau said.
Despite signs that business conditions are improving, it’s important to understand that some manufacturers continue to struggle as a result of difficult economic conditions, he stressed.
“If you are still in that category today, there is still a lot of pain,” Bureau said. “I don’t want to minimize that, but we do want to look at it from an overall perspective of how the manufacturing base is doing. What’s important is that we see how this varies over time.”
The survey targeted manufacturing leaders across the state from companies in a wide range of industrial categories.
“We have a very nice broad brush of Wisconsin manufacturing,” Bureau said. “It’s across the entire spectrum.”
Most of the respondents were C-Suite level executives at manufacturing firms.
About 85% of respondents are classified as small to mid-size manufacturers, ranging in size from fewer than 20 employees to as many as 250.
Approximately 94 percent of respondents are manufacturers in Milwaukee, Madison and the New North region in Northeast Wisconsin, which is proportionate with the state’s overall manufacturing hubs.
“We see an upward trend in all three areas,” Bureau said, adding that manufacturers in the Madison area reported the best overall results. “Surprisingly, we are seeing the New North accelerate past Milwaukee.”
A surprise result of the survey is the number of manufacturers (13%) indicating that business is “up greatly” during the most recent survey period, compared with just 4% in April.
“We have a mixed bag, but we do have some manufacturers that are seeing their business up greatly,” Bureau said. “That’s good news in pointing to the future.”
The survey found that the majority of manufacturers have made significant changes in their workplaces as a result of the Covid-19 crisis.
Among the steps taken have been increased cleaning and disinfecting, restrictions on non-essential workers, policy changes to reduce workplace risks to workers, personal protective equipment, working from home, altered work layouts and changes in scheduling.
“The changes have been made with a goal of mitigating Covid-19,” Bureau said.
An open-ended question asked respondents what practices they’ve implemented in the workplace, a collection of best practices, of sort, as a result of the pandemic. Among the responses: Tracking all employees who report being sick and make sure they visit a doctor; temperature check upon entering an office or factory; face coverings; postponing team-building and social activities; break areas reconfigured; quarantining employees who might have been in risky situations; and conducting virtual meetings instead of in-person sessions.
A new question to manufacturers in the August survey focused on how companies expect their profits to change over the next six months, compared with their current levels. The survey found that 35% of respondents expected their profits to increase. About 27% reported that they expected no change, while 33% believe profits will decrease.
“This certainly suggests that we are going to see a continued focus on cost controls, especially non-labor related costs,” Bureau said.
Pertaining to customer demand, 48% of respondents expect an increase over the next six months, while 16% anticipate a decrease.
“This is the first look into the future that we have from our respondents,” Bureau said. “In totality, we see a favorable trend.”
Finding and retaining employees is also becoming an increasing concern, according to survey respondents.
“Prior to mid-March, this was a super critical issue,” Bureau noted. “We have a structural issue in our economy, with baby boomers retiring. Our ability to find and keep workers was certainly a very hot issue coming into this. What we see here is that this problem is coming back. This talks a little bit to the companies’ recovery.”
Another question unique to the August survey focused on the upcoming November presidential election.
The issue is likely to become an even greater concern in future surveys, Bureau said.
“It’s likely related to uncertainty,” he concluded.
WMEP plans to continue to repeat the survey to evaluate how the manufacturing environment is changing.
“Our focus will be to continue helping manufacturers succeed and become more valuable and more profitable,” Bureau said.