Earlier this year, became a member of the Manufacturing Leadership Council, the highly influential leadership network for senior executives in the manufacturing industry. Recently, the organization outlined some of the market trends it saw affecting the industry this year. I thought I’d share some of them with you.
Manufacturing has seen some challenging times over the last decade but, in the US at least, there is a growing sense of optimism. In fact, The National Association of Manufacturers (NAM) ‘Manufacturers’ Outlook Survey’ found that 2018 was the best year ever for manufacturers’ optimism – and this looks set to continue through 2019. The Manufacturers Leadership Council noted that senior executive confidence currently stands at 92.5 percent. How will this translate into market trends over the year ahead? noted that senior executive confidence currently stands at 92.5 percent. How will this translate into market trends over the year ahead?
The economy is buoyant, but caution is needed
According to the UN, the global economy is set to grow at 3 percent with the US economy performing just below this at 2.9 percent over the last quarter. Research from NAM suggests that this rate will slow but not decline through 2019. Manufacturing production in the US has shown resilient growth in 2018 but this is likely also to slow in 2019 due to skills shortages and the high cost or raw materials. In addition, manufacturing capacity utilization remains quite low – still below 2008 levels – which may make some manufacturers reticent about new investment with under-utilization and uncertain demand. However, as the following market trends from the Manufacturers’ Leadership Council demonstrate, it is essential that companies maintain their investments in digital technologies.
Industry 4.0 adoption continues to rise in 2019
The idea of Industry 4.0 has been around for some time and it is beginning to find widespread adoption. We are beginning to see a greater integration between information technology (IT) and operational technology (OT). The Manufacturing Leadership Council’s market trends pointed to the Outlook survey that showed manufacturers have been working hard towards this and it expects investments to increase over the next 12 months. We can expect to see digital technologies merging more with the physical infrastructure. Organizations will continue to undergo digital transformation and increasingly exploit the data and insights from the integration of IT and OT to drive their business.
India is an attractive hub for foreign investments in the manufacturing sector. Several mobile phone, luxury and automobile brands, among others, have set up or are looking to establish their manufacturing bases in the country.
The manufacturing sector of India has the potential to reach US$ 1 trillion by 2025 and India is expected to rank amongst the top three growth economies and manufacturing destination of the world by the year 2020. The implementation of the Goods and Services Tax (GST) will make India a common market with a GDP of US$ 2.5 trillion along with a population of 1.32 billion people, which will be a big draw for investors.
With impetus on developing industrial corridors and smart cities, the government aims to ensure holistic development of the nation. The corridors would further assist in integrating, monitoring and developing a conducive environment for the industrial development and will promote advance practices in manufacturing.
Manufacturing has emerged as one of the high growth sectors in India. Prime Minister of India, Mr Narendra Modi, had launched the ‘Make in India’ program to place India on the world map as a manufacturing hub and give global recognition to the Indian economy. India is expected to become the fifth largest manufacturing country in the world by the end of year 2020*.
The growing customer base and the increased penetration in consumer durables segment have provided enough scope for the growth of the Indian electronics sector. Also, digitisation of cable could lead to increased broadband penetration in the country and open up new avenues for companies in the electronics industry.