2017
To take advantage of
digitization, industrial
manufacturers need new
operating models, aggressive
hiring, smart partnerships,
and targeted investments.
Industrial manufacturers inhabit a world littered with uneasiness. Global
demand for manufactured products is growing at a snail’s pace. Output is
expected to increase just 3.1 percent in 2016 and 3.4 percent in 2017,
according to the International Monetary Fund. Growth is dampened by Brexit
concerns and political uncertainties. Foreign trade is at historically low levels,
and, although oil prices have recovered a bit recently, they are not rising
enough to undo the collapse in drilling and concomitant retraction in the rest of
the energy supply chain.
More problems could be in the offing. New nationalist governments around the
world, including the United States, are threatening to further undermine the
free flow of goods, creating more uncertainty and constraints upon
manufacturing growth. The ripple effects of any attempts to reset trade
agreements would be felt in the industrial manufacturing sector;
manufacturers with plants in Mexico and China could see their business
models decline quickly under the weight of increased import duties and tariffs.
Many will take a wait-and-see approach, delaying capital expenditure
investments until more clarity on actual policies emerges.