Manufacturers’ 2010 Outlook Depends On The Company’s Size

Advanced Technology Services (ATS) along with Frost & Sullivan, surveyed 150 U.S. manufacturers and found that large companies (those with 1,000 or more workers) seem to have weathered the economic storm the best, with 29% of them reporting no impact from the downturn at all. The report indicated that only 19% of companies surveyed said the economic downturn has had a “great” impact or “very great” impact on their business. Medium-sized companies reported seeing the greatest impact, saying that the economy has resulted in layoffs of full-time workers.

The aftermath of the recession has also left many manufacturers wondering what the repercussions will be on the skilled labor shortage. According to the survey, respondents reported the lack of skilled labor is expected to cost their organizations on average $11 million over the next five years. The cost reported is highest for larger companies and is estimated at $17 million.

The majority of respondents indicated they would fill positions with full time workers when the economy recovers, however, close to a third said they would also fill positions through outsourcing with contract/flexible workforce.

Not everyone appears to agree that there will be a skilled labor shortage. In fact, only a quarter of respondents expect to be affected by a lack of skilled labor with the greatest impact among medium- and large-sized companies. One-third said the availability of skilled workers will not change, while 38% expect a surplus supply of skilled workers. Thirty-six percent said economic growth will resume by the first or second quarter of 2010, whereas 23% expect growth later in the third or fourth quarter. One-fourth of respondents don’t expect growth until 2011 or later.

Small and large manufacturers don’t see eye-to-eye on what’s in store for the U.S. manufacturing sector either. Nearly a third of small manufacturers polled expect to see no growth at all in demand in 2010, with business only starting to pick up in 2011. Bigger companies however, say they are already seeing tentative signs of growth and expect economic recovery to take hold this year.