In the latest MFGWatch Survey of North American Manufacturers, both buyers and suppliers say they are seeing moderate increases in activity - like inquiries for new work and business conditions - the overall response shows a cooling off from the dramatic growth seen in the last quarter of 2010. A combination of rising costs & inflation, economic uncertainty and the Japanese tragedy seemed to be slowing growth. Highlights from the most recent survey (Q1 '11) include:
Japanese Tragedy Impact: Supply Chain Disruptions Increase Significantly In North America - Buy-side manufacturers that report experiencing a significant supply chain disruption jumped to 42% from a relatively low 37% in the last quarter of 2011.
Top Supply Chain Concerns Among Buyers: Logistics & Shipping Costs; Volatile Fuel/Oil Prices; Finding Competent Suppliers - Not surprisingly, Fuel Prices (25%) and Logistics Costs (21%) ranked highest by far among buy-side supply chain managers as their top concerns. Availability of Competent Suppliers (15%) and Product Quality Compliance (12%) were locked in a group for 3rd and 4th greatest concerns. Supplier Financial Health (7%), Intellectual Property Protection (6%), Unstable Labor Costs (4%), Separation of Production from R&D (3%) and Civil Instability (1%) completed their list of concerns.
Small Manufacturers See Business Improve, But Are Hiring Less - While small and medium sized manufacturers reported improved business conditions (46% say they're seeing improvement, continuing an upward trend from the previous quarter's 44%), they failed to manifest those improvements into jobs. As a matter of fact, the strong employment growth in the space in the last quarter of '10 was virtually wiped, as only 26% report they added to their employment roles in Q1 '11. That 26% represents a fall back to the same levels reported in Q3 '10.
Reshoring or Smartshoring? While fewer buy-side manufacturers say they've returned production into or closer to North America in Q1 '11 (17%, down from 25% in the previous quarter), a whopping 37% say they are currently investigating a strategy of moving production closer to markets of consumption.