By far the most popular strategy among manufacturers to increase profitability is to make operational improvements and thereby reduce costs. Yet only 46 percent of survey participants are implementing these improvements to increase profitability; only about one-quarter are using supply chain improvements to reduce costs.

RISK

Downturns in the global economy and fluctuations in currency and commodity pricing were of concern for a greater percentage of manufacturers than local or national domestic regulations. As the labor market tightens, attracting and retaining skilled workers continues to be an issue.

The survey did find that a more reasonable tax and regulatory environment, particularly for middle market manufacturers who make up approximately 40 percent of the GDP, would be welcome. But the likelihood of substantive regulatory changes actually occurring may vary, depending on the sector and the issue. According to the RSM Middle Market Business Index, many executives believe policy changes on a range of issues—including trade agreements, federal regulations, immigration, infrastructure, and tax reform—are likely. Manufacturers should follow proposed regulatory changes closely in order to be able to make effective, timely changes to their strategic goals, objectives and plans.

The perspectives of senior decision- makers offered in this report can help manufacturers compare their middle market organizations to industry peers across the country and around the world. The insights provided by RSM subject matter specialists will enable executives to make informed strategic and tactical decisions based on extensive, detailed data provided by the survey.

To read the full report, go to RSM’s website at rsmus.com.

Darcy Wilson Jones, CPA is an Audit Partner at the Los Angeles office of RSM US LLP. For more information, contact her at (213) 330- 4669 or via darcy.wilson-jones@rsmus.com.

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