By Rich Rovito
Wisconsin manufacturers continue to show signs of improvement, but the recovery remains uneven, the latest COVID/Economic Crisis Manufacturer Pulse Survey conducted by WMEP Manufacturing Solutions shows.
WMEP has released the results of a survey of more than 100 manufacturers conducted in February. This marks the fifth survey of Wisconsin manufacturers since the start of the coronavirus pandemic in March 2020. The survey’s aim is to assess how companies in the industrial sector are responding to COVID-19 and the crippling overall economic crisis that accompanied it.
The latest survey shows that the state’s manufacturers continue to exhibit signs of progress in overcoming an array of challenges tied to the pandemic when compared with previous survey responses from April, May, August and October of 2020.
In the February survey, 8% of survey respondents from across the state indicated that their business was down “greatly,” which is defined as a decline of 30% or more when comparing their current state of business to where it stood under normal circumstances. This number stood at 37% in the April 2020 survey and 18% in October.
“This is a good story,” WMEP’s Vice President of Consulting Services George Bureau said. “This certainly suggests and supports the recovery in the Wisconsin manufacturing sector.”
At the same time, nearly half of the survey respondents indicated that their business remains down compared with a normal year.
On a positive note, nearly 40% of manufacturers said their business was up to some extent.
Although manufacturers continue to show improvement overall, the recovery is uneven and varies by size, with the smallest firms lagging.
“The larger firms are coming back faster but small firms are starting to catch up,” Bureau said.
The recovery from economic crises also varies by region, with manufacturers in the Madison area leading the way. The latest survey shows continued improvement in the state’s three largest areas for manufacturing, with the Milwaukee area and the Northeast section of the state narrowing the gap on the Madison area, which has outpaced other parts of the state in recovering from the pandemic since the first survey early in the pandemic.
Manufacturers involved in primary and fabricated metal have shown stronger signs of recovery than other sectors, the survey showed.
About 71% of the manufacturers surveyed indicated that they expect customer demand to increase over the next six months, compared with 53% in the October survey. A small percentage are expecting customer demand to decrease.
“There are different sectors within manufacturing that are perhaps doing better than others, but overall, the expectation over the next six months is that demand will increase,” Bureau said.
Profitability has been slow to recover, with 47% of survey respondents seeing no change or a decrease in profits.
“Profit is a lagging indicator and if you look at this on a national stage, manufacturing has recovered but profitability has lagged and we are certainly seeing the same here in Wisconsin,” Bureau said. “The expectation is that profits will begin to recover over the next six months.”
Responses to the survey showed that manufacturers have successfully adapted to COVID-19 risks with little or no impact on operations.
Manufacturers took decisive action as a result of the COVID-19 pandemic, with 91% of companies surveyed stating that they adopted policies to prevent worker exposure to the coronavirus.
“Vigilance is still important. We aren’t out of the woods yet,” Bureau warned.
During a presentation of the survey results at WMEP’s Manufacturing Matters! conference on Feb. 25, manufacturers were asked how they have been handling COVID-19 vaccinations with their employees.
Nearly one-third said they have or will suggest that employees receive the vaccine, 35% were neutral and 30% indicated that they planned to offer incentives to encourage employees to get vaccinated. A small percentage stated that they planned to make vaccines mandatory among their workforces.
In an open-ended portion of the survey, respondents were asked to identify their ongoing concerns as the pandemic continues to show signs of subsiding.
“Finding and keeping employees is returning to be a top issue, as expected, as the crisis has subsided somewhat,” Bureau said.
A new concern not mentioned in earlier surveys is how the administration of new President Joe Biden will affect the manufacturing sector.
The subsiding of the pandemic has eased the minds of many manufacturers who worried that the COVID-19 pandemic could have a catastrophic and long-lasting impacts on the industrial sector, the survey found.
“Economic collapse has become a very distant concern,” Bureau said.
- Fourth Economic Crisis/COVID-19 Wisconsin Manufacturer Pulse Survey 10-27-2020 – Presentation Link.
- Fourth Economic Crisis/COVID-19 Wisconsin Manufacturer Pulse Survey 10-27-2020 – Webinar Recording Link.
- Fifth Economic Crisis/Covid-19 Wisconsin Manufacturer Pulse Survey 02-18-21 – Presentation Link from Manufacturing Matters! 2021.