VIEWPOINTS INDUSTRY LEADER OPINION & ANALYSIS T
he manufacturing sector is on a roll. Revenues are up, industrial output is strong, and M&A activity is gain- ing momentum. The sector is reaping the benefi ts of cheaper energy prices and increased productivity, as well as stable wage levels throughout much of the developed world. These favorable trends are expected to continue into the new year and beyond. Not all countries are participating equally in this resur- gence. Manufacturing in some of the developing countries has slowed as a result of infrastructure challenges and an overall decline in the global demand for exports. On the other hand, the US has emerged as a strong competitor to China’s manufacturing industries. In PwC’s Q3 2014 Manufacturing Barometer, a quarterly survey of US-based manufacturing executives, respondents forecast an average growth rate of 5.6% over the next 12 months, up from 4.2% a year ago. M&A market trends tend to be a good refl ection of the state of manufacturing, and activity level and deal values were up sharply in 2014. Deal momentum should continue as cash-rich manufacturers seek out opportunities to im- prove supply chains and add talent and technical capabilities to boost innovation. But, given today’s global economic and geopolitical instability, manufacturers are likely to remain fo- cused on relatively low-risk markets such as North America. Cheaper energy prices are helping to propel the sector as a whole. In the US, the shale gas phenomenon is creating new jobs, reducing the cost of manufactured goods, and bolstering the country’s global competitive position. With its abundant supply of shale and the success of fracking, the US is building new export facilities that will be able to transport liquid natural gas (LNG) to Europe. Overall, manu- facturing companies worldwide are benefi tting from lower oil prices, as the major oil producers reduce prices in response to the threat of shale as an alternative energy source.
144
AdvancedManufacturing.org | January 2015
Rate of Manufacturing Growth Expected to Climb Cheaper domestic energy is also slowing offshoring by
v
narrowing the gap in manufacturing costs. Some companies are even relocating production back to the US or building ad- ditional domestic plants, especially in low-wage areas of the country. This on-shoring strategy is helping some manufac- turers to lower their transportation costs by moving closer to their customers and to reduce supply chain risk.
The most dramatic commercial benefi ts of technological innovation are still to come.
Another key driver of sector growth is the availability of
more productive and cost-effi cient manufacturing tech- niques. The use of 3D printing (3DP) for prototypes and low-volume fi nished parts and goods is growing. Other new technologies, such as advanced robotics and mobile computing are also dramatically reshaping operations. Remote sensors embedded in machinery are providing real- time information on performance, alerting manufacturers to product or service problems and enabling them to make rapid adjustments. Yet, the most dramatic commercial benefi ts of technologi- cal innovation are still to come. Individual technologies will be connected through cloud computing and the Internet of Things. Big data captured from machinery and the applica- tion of predictive analytics to data will allow manufacturers to reach much greater productivity levels and bring about the smart manufacturing revolution. However, these fundamental changes may also cause massive disruptions in the industry. As value increasingly becomes defi ned in terms of software and digitization, manufacturers will need to rethink their business models and skill sets.
Bobby Bono
Industrial Manufacturing Leader PwC US
www.pwc.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148