84% of Manufacturing Executives Anticipate a Recession by 2026, According to New CADDi Research
September 11, 2024
- Nearly half are prepping for a recession within the next twelve months
- Just 11% have a positive short- and medium-term economic outlook
- Research reveals U.S. manufacturers continue to struggle with data issues, talent and supply chain challenges and institutional knowledge loss
While nearly half (49%) of U.S. manufacturers expect a recession to hit in 2025 and an overwhelming majority (84%) think it will happen within the next two years, most are overlooking straight-forward opportunities to lower their costs and drive profitability ahead of a down market, according to new research conducted and released on September 11th by CADDi. The proprietary research, which is based on a survey of more than 330 U.S. manufacturing professionals, reveals that manufacturers are making financial decisions based off incomplete information.
Sixty percent of procurement professionals have sourced a part at a higher cost than what they knew was possible because they didn’t have access to sufficient supplier data to negotiate effectively. The same percentage of respondents said they’ve missed an opportunity to consolidate suppliers and/or negotiate a volume discount because they didn’t have access to historical cost data associated with similar parts. Additionally, 71% of sales professionals have quoted or sold an unprofitable deal for their company because they didn’t have access to the historical engineering and procurement data they needed.
“American manufacturers are feeling pressure from every angle – the economy, talent shortage, rising competition from China and Mexico, and more. Our research indicates that data and collaboration issues are exacerbating the pressure. Internal teams can’t access the information they need to do their jobs and make smart and profitable decisions fast enough, which increases the stakes for manufacturers that don’t take steps to address the inefficiencies,” said Yushiro Kato, CEO of CADDi.
CADDi’s research – The American Manufacturing Pressure and Productivity Index – explores manufacturers’ top priorities and pressures and the productivity killers that threaten their success. Key findings include:
- Talent challenges remain top pressure drivers, including a lack of access to skilled labor (56%) and equipping current employees to step into strategic roles (50%).
- Speed to market – which 23% of manufacturers say is a 2025 priority – is at risk. Seventy-seven percent of procurement professionals say that every few projects they need to find a new part, product or supplier because the one they found didn’t meet engineering’s specifications.
- A “Great Experience Exit” is on the Horizon. Nearly three-quarters of senior executives expect to retire within the next decade. Sixty-eight percent believe at least half of their institutional knowledge will be lost forever when they retire.
- Manufacturers fear they aren’t transforming fast enough to survive (27%). Forty-five percent of senior management leaders cite digitally transforming their operations as a top business pressure.
- Pressure persists to onshore manufacturing. Navigating political demands to bring more production onshore (51%) was cited as a top three pressure point.
Pervasive Data Issues Undermine Productivity and Competitiveness
Sales, procurement and engineering teams generally spend at least 25-50% of their workdays tracking down critical information to do their jobs and ensuring the accuracy of this information.
When asked about their biggest frustrations, inadequate documentation (73%) – missing part numbers, dimensions, and material properties – topped the list for procurement. Sales professionals cited long quotation processes due to needing to track down relevant information (67%) and poor collaboration and communication with procurement and engineering that leads to delays and misunderstandings (33%).
“The consensus across the procurement, engineering and sales professionals we surveyed was that leveraging AI and having easy access to data from past projects would enable them to design better products faster, negotiate with suppliers to secure volume discounts, and speed up the quoting process to win new business. Enabling talent to perform in these areas is key to ensuring the organization’s competitiveness and long-term viability,” added Kato.
Access the full report to dive deeper into the state of manufacturing pressure and productivity.
About CADDi Inc.
CADDi is a manufacturing intelligence software company on a mission to democratize your drawings and supply chain data. Our primary product offering in the United States, CADDi Drawer, leverages patented AI to aggregate, analyze and extract everything you need from your data to produce better products. In 2024, CADDi was the sole manufacturing SaaS company featured on Fast Company’s Most Innovative Companies 2024 list, and won Best Business Intelligence and Engineering Management Software in the 2024 SaaS awards.
