Opportunities at our Doorstep - doing business in Canada and Mexico
National Trends in Manufacturing - Karen Kurek, national manufacturing & distribution practice leader, McGladrey
1. Next Generation Manufacturing
What lies ahead for manufacturers and distributers
Karen L. Kurek
National Manufacturing & Distribution Practice Leader at McGladrey
October 23, 2012
St. Paul Hilton Mall of America, Minneapolis, MN
2. About McGladrey
• 80+ year history
• Fifth-largest provider of accounting, tax and
business consulting services in the U.S.
• We provide services to more than 8,000 midsize
manufacturers and distributors across the nation
• 75 U.S. offices; offices in 85 countries worldwide
• 6,500 professionals nationally, 32,000 worldwide
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3. A distinctive industry focus
Understanding your • Focused on the middle market
business • Industry association memberships and board appointments
and industry • Advocate on both national and local levels
Sharing global best • Manufacturing & Distribution Monitor
practices • CFO Clubs
• Executive Summits
• Webinars
• Thought leadership articles and publications
Providing resources • National resources and services
• Subject matter experts
• Local, national and international presence
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4. U.S. still dominates manufacturing
worldwide, with China close behind
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Source: United Nations Statistics Division; the World Bank.
5. Real GDP forecast
Source: Bureau of Economic Analysis, NAM calculations , Moody’s Analytics simulation model 4
15. A Manufacturing Renaissance:
Four goals for economic growth
1. The United States will be the best place in the world to
manufacture and to attract foreign direct investment.
2. The United States will expand access to global markets to
enable manufacturers to reach the 95 percent of consumers
who live outside our borders.
3. Manufacturers in the United States will have the workforce
that the 21st-century economy requires.
4. Manufacturers in the United States will be the world’s
leading innovators.
Source: National Association of Manufacturers 14
16. NAM: Critical issues affecting
the industry
•Tax reform: The coming “taxmageddon”
•Regulatory reform: Potential impact of the EPA's proposed regulations
•Trade and exports: A national competitiveness strategy must prioritize
exports
•Workforce investment: Education and training programs that result in
nationally portable, industry-recognized credentials
•Health care reform: Addressing costs and increasing regulation
•Innovation and efficiency: The impact of high energy prices
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17. Minnesota profile
• State job growth rose 2.2% in July 2012 from a year ago; national job
growth rose 1.4%
• State unemployment averaged 5.9% in July 2012; the national average
was 8.3%
• Personal income rose 2.6% to $243.0 billion in Q1 2012 from a year ago.
• Tax revenue increased 3.2% in Q1 2012 from a year ago.
• Exports fell 2.8% to $13.3 billion in the first four months of 2012 from a
year ago.
• Venture capital investment in MN rose 20.8% to $70.5 million in Q1 2012
from a year ago
Source: First research – September 2012 16
23. Industrial and Commercial
Sector in biggest decline
Industry Sector Thriving in 2011 Thriving in 2012
Aerospace - 34%
Automotive (OEM and Aftermarket) 57% 45%
Biotech, Life Sciences and Medical Equipment/Supplies 38% 45%
Building Materials 24% 28%
Chemicals, Petroleum and Plastics 48% 40%
Computers, Electronics and Electrical Components/Appliances 52% 41%
Energy and CleanTech 41% 48%
Food and Beverage 44% 47%
Furniture and Fixtures 17% 34%
Industrial and Commercial Machinery 20% Decrease 63% 43%
Metal Fabrication 47% 41%
Textiles, Apparel and Accessories 29% 16%
Transportation Equipment 52% 50%
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Wood/Paper Products and Printing 25% 29%
24. Business optimism and the
outlook for growth
U.S. Economy
dropped 15%
World Economy
dropped 33%
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Source: 2012 McGladrey Monitor
35. Capital expenditures
Capital equipment spending compared to previous year (average)
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Source: 2012 McGladrey Monitor
36. Capital expenditure changes
in the next 12 months
Information
technology is
the biggest
target for all
companies
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Source: 2012 McGladrey Monitor
37. Most midsize companies
likely to increase workforce
• Two thirds of companies (67%) are expected to increase employment levels
- 67% 2012 vs. 56% in 2011
- Private equity companies are most likely to increase hiring (76%)
- 85% of T&G companies plan to increase workforce where 42% of
declining companies plan to reduce workforce
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Source: 2012 McGladrey Monitor
44. Best practices of thriving and
growing companies
• Have increased and plan to increase U.S. and non-U.S. sales
• Corporate objectives are all about infrastructure
• Plan to use the following sales strategies to drive growth:
- Increased penetration in existing markets
- New customer segments
- New products and line extensions
• Hiring talent by proactively addressing skills gap
• Have a mature continuous improvement culture
• Annual investment in R&D is higher compared to others
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Source: 2012 McGladrey Monitor
45. Experience the power of being understood.SM
In addition to the key findings outlined in this
presentation, results from the 2012 McGladrey
Manufacturing and Distribution Monitor can be found at
http://www.mcgladrey.com
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