Global Manufacturing Industry Outlook 2017-2025

Global Economy Outlook

Since mid-2016 global economy is seen to be strengthening with the year on year growth rate estimated in nearly 120 countries that contribute 3 portion share of the quarter in the global GDP. 2017 saw high growth rates in the global trade, supported by the increasing investments in not only advanced economies but also the emerging economies. Asia experienced a huge manufacturing output in a few sectors, such as in smartphones. Northeast Asian governments are shifting their economy towards manufacturing on the back of creating manufacturing hubs in the wake of protectionism, investments and support to domestic companies. Thus, the forces of globalization, demographics and technological interventions have made the global manufacturers optimistic towards businesses, industry and economy. 68% of manufacturers expect growth of their company in 2018.

Manufacturers Future Prospects

Globally the manufacturers are looking forward towards increasing revenues, cutting costs and to attract and retain talent workforce. Mergers and acquisitions, fresh investments, research and development activities, targeting new geographical regions and manufacturing new and innovative products are likely to harness more revenue for the manufacturers. Nearly 62% of manufacturers consider growth as a high priority, thus adopting aggressive strategies to achieve the desired growth rates in the fast developing world. Further, the focus on talent workforce by providing internal training and increasing compensation will lead to retain and grow the workforce. Moreover, the issue of labour shortage majorly in the developed economies could be compensated by adopting the advanced technologies such as artificial intelligence (AI), cognitive technologies, machine learning, Internet of Things (IoT), mixed reality, no-collar workforce and many other technologies.

Technological Trends

Manufacturing has been the key factor in the industrialization and the adaptation of advancing technologies has led to the development of new era in industry revolution i.e. Industry 4.0 to digitize, automate and modernize the manufacturing sector. 78% of manufacturing companies have digitized their operations and 55% have adopted protection through cyber security. Digitizing has sped up the delivery process and achieving optimization. Further, of all the technologies in the manufacturing sector, business-specific apps have gained the highest popularity that is expected to have the most impact in near future. This is followed by cloud-computing, robotics and block-chain technology. Unlike financial industry, the block-chain technology still has to go far in its adoption in manufacturing industry which thereafter is expected to revive the supply chain management at the first place along with other advantages like delivery and settlement assurance and counterfeit prevention.

Industry Challenges

As per the manufacturers in the industry, major business risks are related to domestic and global demand, geopolitical risks, price and margin pressure, increasing competition, skills and labour issue, raw material prices and trade barriers. The issue of labour is continuously increasing worldwide and by 2025 approximately 2 million manufacturing jobs would be left unfilled. The application of automated tools and machinery and robots can only prove to be the lifeboat of a manufacturing company. Further, the rate of changing pattern in the product demand is increasing thus challenging the companies to adopt flexible tools and equipment to serve the changing domestic and global needs. The competition in the industry is getting fierce and the business risk from the competition has moved to a higher ranking in 2017 as compared to 2016 and is expected to continue to rise on the line of advancing technologies.

Impact Analysis

Global manufacturing output in early 2017 had increased by 3.7% as compared to the same period in 2016. Strong growth performance of the emerging countries have a significant share in the global manufacturing output, and continued growth rates are expected in developing economies such as China, Brazil and India. On the other hand, the industrialized countries such as the UK, US, Germany, Japan and the Republic of Korea have a major share in raising the average manufacturing output in 2017 as compared to 2016. The rising competition and adaptation of technology are helping successful businesses to grow further and ruling out the weak & meagre manufacturing companies. The Asian countries have been improving their manufacturing industry, through government protecting their domestic companies from global competition by adopting trade policies and shifting their orientation towards increasing exports and importing advanced technologies.  Moreover, over the period of time, the advanced technologies have become affordable that the small and mid-sized companies all over the world are now able to automate their manufacturing operations and sustain in the fast developing world, thus resulting in the rise in contribution to the global manufacturing output.