- July 12, 2022
According to a recent national study from Umpqua Bank, U.S. manufacturers are prepared to make significant changes in the next 12 months to solve for macroeconomic challenges related to rising inflation, the labor shortage and ongoing supply chain disruption.
July 12, 2022 - According to a recent national study from Umpqua Bank, U.S. manufacturers are prepared to make significant changes in the next 12 months to solve for macroeconomic challenges related to rising inflation, the labor shortage and ongoing supply chain disruption.
Manufacturers surveyed in Umpqua Bank's 2022 Business Barometer cite inflation as the overall number-one economic concern, with 59% ranking it as a top challenge. Roughly 6 in 10 surveyed companies are also having difficulty finding qualified employees, and 59% indicate that navigating supply chain issues is the most important area of their business to address for success in the coming year.
To address these challenges, manufacturers are likely to make significant changes to their products and services (73%) and pricing models (77%) in the next 12 months, as well as invest in digitization to become more efficient (83%). Compared to other sectors, manufacturers are more focused on finding new suppliers (71%) or strengthening relationships with current suppliers (60%) and implementing new inventory management techniques to address ongoing supply chain disruption (43%). Manufacturers are also likely to allow more remote work options (73%), increase pay and benefits (71%), and adopt creative ways to support working parents (79%), as attracting and retaining workforce talent pose increasing challenges to growth.
"Manufacturing leaders continue to show the ability to adapt quickly and are taking strong steps to diversify their business as they navigate all of the challenges," said Richard Cabrera, Umpqua's head of middle market banking. "Current headwinds present an opportunity for forward-thinking, innovative companies to change in ways that position them for future growth."
Other notable insights from Umpqua Bank's research
- 35% of manufacturers say the talent shortage has increased lead times to deliver goods and services, the most cited effect in the sector.
- Rising interest rates is cited as a primary concern, with 41% of manufacturers noting it among their top-three challenges.
- Uncertainty related to COVID-19 or continued outbreaks also ranks as a top concern for 41% of manufacturers.
- Cybersecurity is a focus point for a majority of manufacturing businesses. Nearly 7 in 10 are likely to invest in financial tools to protect their payment systems in the year ahead. Nearly 30% say investing in cyber security is critical to their success in next 12 months.
- A solid portion of manufacturers have significant strategic moves in mind, with 43% saying they are likely to increase their real estate footprint in the next 12 months. Three in 10 are also likely to consider acquiring (32%) or merging with (30%) another business.
For the full report, visit the website.
About Umpqua Bank
Umpqua Bank, headquartered in Roseburg, Ore., is a subsidiary of Umpqua Holdings Corporation and operates across seven states, including Arizona, California, Colorado, Idaho, Nevada, Oregon, and Washington. Umpqua Bank has been recognized for its innovative customer experience and banking strategy by national publications including The Wall Street Journal, The New York Times, BusinessWeek, Fast Company and CNBC. The company has been recognized for eight years in a row on FORTUNE magazine's list of the country's "100 Best Companies to Work For," and was recently named by The Portland Business Journal the Most Admired Financial Services Company in Oregon for the 17th consecutive year. In addition to its retail banking presence, Umpqua Bank also owns Financial Pacific Leasing, Inc., a nationally recognized commercial finance company that provides equipment leases to businesses.Read more
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