Manufacturing firms braced for tough times ahead

London - Manufacturers worldwide are bracing themselves for more challenging times ahead, but are continuing to invest in skills and R&D, according to a survey of CEO by PricewaterhouseCooper.

Also top of the agenda for manufacturing CEOs, now and in the immediate future, was the cost of energy and access to raw materials, found the survey of 173 industrial manufacturing CEOs around the world on their perceptions, aspirations and concerns for the industry.

The consensus was, ‘not as confident this year, as last’, with particular scepticism over the economic outlook. China was the top market to watch out for, followed by the US and Germany.

Manufacturing executives are also concerned about operating costs and skill shortages.

This year, 82% of CEOs said they were planning on a cost-cutting exercise, although investment in R&D will be protected as 45% are making it one of their top three investment priorities. The majority of CEOs, 60%, are also increasing their investment in building and nurturing a skilled workforce.

For the longer term, PwC found optimism about investing in R&D schemes that will contribute to business growth and give manufacturers a global platform to compete on.

CEOs have some really challenging and tough decisions to safeguard the future success of their businesses, believes Barry Misthal, global industrial manufacturing leader at PwC.

Cost-cutting initiatives, he noted, can disrupt operations and moral, but during these times, are sometime necessary.

“Accessing natural resources that the industry needs for producing many of the products customers are demanding is another concern for the vast majority we surveyed,” said Misthal.

“Restriction of these critical resources will undoubtedly place pressure not just on the immediate manufacturing supply chain, but those in other sectors such as metals, chemicals and the automotive sector,” he concluded.