A recent Indiana manufacturers survey reports that, while bullish on the future of the state’s largest industry, Hoosier manufacturers are concerned that financial growth rates have stalled.
The annual survey – authored by faculty from the Indiana University’s Kelley School of Business Indianapolis, commissioned by Katz, Sapper & Miller, and promoted by the Indiana Manufacturers Association and Conexus Indiana – is designed to assess the state of Indiana’s manufacturing industry and provide insights into management choices made by manufacturing companies across the state.
“This year’s findings are consistent with our client feedback: There are deep concerns about the future of Indiana’s manufacturing sector, particularly as it relates to workforce and regulatory concerns,” said Jason Patch, partner-in-charge of Katz Sapper & Miller’s Manufacturing & Distribution Services Group. “Indiana’s manufacturers seek seismic changes in healthcare, tax law and economic development in order to confidently build their businesses in the future.”
The authors of the 2016 survey analyzed the data and suggested several reasons that expected growth rates for revenues, profits and capital investment are diminishing:
- The maturing of the national economic recovery
- New technologies, facilities and process improvement philosophies (e.g., Six Sigma) that were key investments post-recovery to boost productivity have now matured, limiting additional growth opportunities
- A shortage of skilled workers continues to hamper growth; additionally, relatively low unemployment rates in the state further impact prospects
- Regulatory and reporting burdens, particularly healthcare regulation and high corporate tax rates.
“One possibility is that these diminishing growth rates reflect a recovery that has matured, but we believe attributing it solely to this factor would be shortsighted and implies that this trend is inevitable. On the contrary – we believe there are steps that can be taken to improve the environment and help our manufacturing sector succeed. They just need the right tools and support,” said survey co-author Steve Jones, a professor of finance and chair of the IU Kelley School of Business Indianapolis Evening MBA Program.
Full results of the study can be found here (pdf).