With hundreds of participants, this survey report contains the expectations and opinions of manufacturing executives in more than 25 states across the county producing a wide variety of products including industrial/machining, transportation/automotive, construction, food and beverage, and other products.

Results from the survey include:

• 74% of small manufacturers and 69% of large manufacturers expect revenue to grow in 2017.
• Manufacturers are more optimistic about their local/regional economies than the national or global economies.
• The top priority for manufacturers in 2017 is “cutting operations costs”, however, high-growth manufacturing respondents are more focused on “research and development”, with 12% of high-growth respondents reinvesting more than 10% of annual revenue.
• Labor continues to be a challenge for manufacturers with 67% of respondents expecting labor costs to “increase” and an additional 7% expect labor costs to “increase significantly” in 2017.
• Appropriate cost allocation and accurate and timely data will become required capabilities for successful businesses in the industry.
• More manufacturers will be considering both sales and mergers in 2017 as well as strategic acquisitions.

U.S. manufacturing industry headwinds are significant and include both internal issues, such as high inventory-to-sales ratios, the cost of technology, and labor shortages, as well as external issues like the price of raw materials and strength of the dollar.

Strategic manufacturers should have ongoing conversations with all of their advisors, including their accounting and tax provider, as to how to overcome these challenges and achieve their business goals.

“There are a range of value added services we can offer manufacturers, from tax credits to export tax incentives,” said Lutz Partner and manufacturing client group leader, Jim Honz. “What manufacturers cannot afford to do, is take a ‘wait and see’ approach.”