Manufacturers appear more likely than other sectors to do businesses differently than they did pre-pandemic, according to a recent study from Umpqua Bank. About 73% of companies surveyed expect to maintain most or all of the changes put in place since March of last year. That's far higher than the national average of 54% and any of the eight industry cohorts covered in the survey.
And while manufacturers continue to face supply chain disruptions as a result of the pandemic, these companies are more optimistic (65%) than the national average (52%), saying they expect overall economic conditions in the U.S. will improve.
The findings are part of a 2021 Business Barometer report released by Umpqua Bank that provides an in-depth study into the mood, mindset and strategic priorities of nearly 1,200 leaders at small and mid-size companies across the United States. The survey breaks down results into seven major industries.
The survey shows that manufacturers will continue to retool their approaches over the next year. About 61% of manufacturers said they were likely to change their products and services, more than any other sector, and well above a survey average of 37%.
Half of the manufacturing businesses said they plan to change their pricing model, slightly higher than the 45% average for all survey respondents. And 70% of companies surveyed say they want to find ways to automate repetitive tasks previously performed by workers, more than any other sector and much higher than the national average of 44%.
"Manufacturers from small shops to mid-sized companies have showed remarkable resilience during the pandemic, investing in automation and evolving the way they've done business over the years," says Richard Cabrera, executive vice president and head of middle market banking at Umpqua Bank. "Even through all the difficulty, the pandemic has served as a catalyst in jumpstarting new approaches, with a newfound focus on efficiency and productivity."
Some other key takeaways from the survey:
- Roughly 55% of manufacturers said they were more likely to take on debt to finance growth over the next 12 months, compared with an average of 29% for all companies, and by far the highest among all industries, trailed by business services (35%), construction (34%), and wholesale (27%).
- The optimism of manufacturers (65%) was higher than any other industry, such as wholesale (59%), finance/insurance/real estate (58%), and construction (56%).
- About 36% said that they're considering an increase to their real estate footprint, versus 32% for all sectors.
- About 30% said they are more likely to acquire another business in the coming year, versus 26% of all companies.
- Manufacturers' focus on automation (70%) far outpaced the other sectors, such as wholesale (56%), business services (50%), retail (40%) and healthcare (27%).
"Without a doubt it has been a difficult time for many manufacturing businesses over the last year or so, but we see very encouraging signs," Cabrera says. "We're likely entering a new phase of competitiveness, marked by entrepreneurship, creativity and innovation."
Read the full Umpqua Bank 2021 Business Barometer here.