News, Insights and Best Practices for Manufacturing in Mexico

Manufacturers confident about global growth

30 Dec 2013

Category: Labor & Economics, Manufacturing in Mexico

Companies have experienced growth since the U.S. economy began to recover from the recession, but manufacturers often remain uneasy about unpredictable costs and currency fluctuations. According to the "Accenture 2013 Global Manufacturing Report: Thriving in a world of uncertainty and volatility," 92 percent of the 250 global senior manufacturing executives surveyed said their companies have experienced revenue growth since 2011. While 88 percent also said they anticipate further growth, many said they are concerned about unpredictable areas of business that may hamper their success.

Companies want to be responsive to challenges
One way manufacturers can plan for a strong future is to manufacture in Mexico. Expanding the production process south of the U.S. border can help companies weather unexpected challenges, such as high energy prices. With Mexico's low cost manufacturing climate, companies can keep their supply chains flexible and adapt factory capabilities to meet product demands. In fact, the report noted 82 percent of surveyed executives said they need to be able to easily move production between plants or alter their product mixes to keep up with consumer needs and achieve growth objectives.

Remaining responsive to challenges is a high priority for a majority of manufacturers, yet only some said they had the capability to be flexible to competition challenges and market dynamics. Twenty-four percent said they are "highly adept at accurately sensing marketing changes before competitors," and only 29 percent noted their businesses had "full visibility into their network's operations."

With Mexico close to the U.S. and Canada, it is much easier for manufacturers to have flexible processes and mitigate any challenges that arise. Many companies understand the benefits of offshore manufacturing but want to maintain flexibility - a possibility that is likely in a robust manufacturing environment such as Mexico. With 72 percent of the survey respondents claiming they will focus on improving their operations next year, more manufacturers may expand to Mexico.

Companies anticipate global growth
Manufacturing was one of the industries hit hardest by the Great Recession, but the Accenture survey found businesses remain optimistic about the future. Seventy-five percent said they have hired more workers since 2011, and 66 percent of executives claimed they will boost their workforce by 5 percent or more next year. In fact, Industry Week reported previous research found more manufacturers felt better about bringing on additional staff this year than in the past. 

According to Bloomberg, this focus on growth isn't a shock. The news source reported data from the Institute for Supply Management noted sales will be higher in 2014 than in 2013. While 2013 was a profitable year for many manufacturers, with the industry seeing a 3.4 percent increase in revenue, manufacturers anticipate a 4.8 percent boost in revenue in 2014 and a 4.4 percent rise in sales.

"As confidence boosts, so does the ability and the appetite for adding labor," Anthony Nieves, chairman of the institute's nonmanufacturing committee, said on a conference call with reporters, according to Bloomberg. "Companies have been doing more with less for quite some time." 


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