INDUSTRIALS & MANUFACTURING

Over the last 25 years manufacturing in advanced economies has declined as a share of GDP, and this has been balanced by sharp increase in China and other Asian economies. The pandemic, along with wars in Ukraine and the Middle East, have highlighted the now global nature of manufacturing and resulting supply chain dependencies. 

Business and governments are taking steps to increase supply chain resilience and to reduce dependencies where geopolitical tensions are high – including Chinese manufacturing, Russian energy and natural resources.  In the United States multiple pieces of legislation have been enacted such as the 2022 Inflation Reduction Act and the 2021 Infrastructure Investment and Jobs Act which are driving billions of dollars of into the sector.

Against this economic and geopolitical backdrop global trends are creating specific challenges for the sector including:

• Technology transformation – is reshaping the manufacturing landscape with Industry 4.0 technologies including automation, IoT, advanced analytics, machine learning and artificial Intelligence driving rapid changes enabled by ever increasing computing power
• Changing workforce – as manufacturing becomes more sophisticated, traditional manufacturing jobs are being replaced by automation while the demand for highly skilled staff in the sector is outstripping supply
• ESG priorities – including carbon footprint reduction, improvements in international environmental standards and eco-friendly production practices are demanding of new investment and additional management skills
• Cost competitiveness – manufacturers face a continuing battle to maintain profitability in the face of recent waves of inflation and resulting increased costs for materials, energy and labour – while rising interest rates and global competition bring further pressure