For North American businesses of all types, especially those in the manufacturing sector, 2022 was anything but typical. Or boring. Or easy. ‘Labor shortages’ and ‘Supply chain issues’ became go-to phrases that encapsulated the most significant challenges for industry. Challenges that are continuing well into 2023.
In a recent survey from National Association of Manufacturers, 75% of manufacturing companies listed that their biggest challenge is ‘attracting and retaining a quality workforce’. And when looking at the latest statistics, you understand why; The Bureau of Labor & Statistics estimates that there are around 644,000 open jobs in the manufacturing sector –almost 50% more than the pre-pandemic numbers. The national jobless rate has not been this low since Neil Armstrong and Buzz Aldrin walked on the moon in 1969.
Supply chain challenges is another struggle for manufacturers in the US and Canada. And although supply side issues have dominated the headlines, tremendous pressures have built up on the demand side too, meaning manufacturers are struggling to adapt their resources to rapidly changing product mixes and rising demand. On top of this comes inflation combined with rising interest rates, making borrowing more expensive.
Isn’t there any good news, you might ask? COVID is now a manageable scale pandemic, supply chain issues are improving monthly, and inflation has dropped by more than 50% from its peak.
On top of this, reshoring initiatives are gaining ground around North America as businesses and policy makers at both state and federal levels recognize the importance of having a strong domestic manufacturing sector.
In fact, some 62% of manufacturers have already started reshoring or near-shoring their production capacities, according to a report by Deloitte, based on a survey of 305 executives at transport and manufacturing firms, mostly in the U.S., with annual revenue of $500 million to more than $50 billion.