For four straight years, the Michigan Manufacturers Association (MMA) and Baker Strategy Group (BSG) have partnered to conduct the annual Michigan Manufacturers Outlook Survey. This instrument has become a valuable tool for measuring year-over-year trends in the manufacturing industry and to gauge the collective outlook for manufacturers in Michigan.
2. For four straight years, the Michigan Manufacturers Association (MMA) and Baker Strategy Group (BSG) have partnered to
conduct the annual Michigan Manufacturers Outlook Survey. This instrument has become a valuable tool for measuring
year-over-year trends in the manufacturing industry and to gauge the collective outlook for manufacturers in Michigan.
This year we received feedback from 400 respondents. The majority (59%) of the respondents are executives at their
companies, but we also received solid representation from plant management, sales and marketing, human
resources, operations, regulatory compliance, government relations, and accounting/finance.
In conducting our analysis, we focus primarily on respondents representing companies who manufacture in Michigan.
Some salient statistics on these companies include: 61% are family-owned businesses, 56% have 100 or fewer
employees, 60% have only one facility in Michigan, 37% manufacture automotive products, 92% 6manufacture non-
automotive products, and 80% have a non-unionized workforce.
With four years of data, we are able to look back and see progress and changes over time. What follows are 8 Key
Findings we observed in the data.
3. 1 An Improved Company Outlook Michigan manufacturers are enthused about
their company‘s prospects. Each year we
ask respondents to gauge their company‘s
Rate your company's outlook for the following periods: outlook by looking at three time periods: 6
10
months out, 1 year out, and 3 years out.
Since 2009, scores for each of these
9 measures has increased annually. The one-
year outlook has jumped from 4.9 beginning
2009 to 7.2 beginning 2012. And while the
8 7.5 outlook scores remain at moderate levels, the
7.3 7.4 upward momentum is clear.
6.8 6.9 7.2
7 Sample comments:
6.3
6.8 • ―The next 3 years are very hard to project.
6 6.4 But if the government can shrink and get a
grip on the concept of fiscal responsibility
4.9 and actually put it to work, then will we
5 5.4 have a strong outlook for years to
Next 3 years come, not just for three years.‖ –
4
Executive, furniture manufacturer
Next 12 months
3.9 Next 6 months • ―We have been here since 1957 and plan
3 to be here for a long time.‖ –
Executive, transportation equipment
manufacturer
2
• ―We are conservatively optimistic. We did
take a big hit two years ago and we are
1
still trying to recover.‖ –
2009 2010 2011 2012 Executive, automotive components
manufacturer
(1 = “Poor”, 10 = “Excellent”)
4. 2 A More Business-Friendly Michigan
Rate your level of agreement with the following statements:
10
According to respondents, Michigan remains
an average state for doing business. But the
9 good news is that we‘ve improved over the
Michigan is a great state for our company's business
past few years. In 2009, Michigan‘s score for
being a business-friendly state was 3.3. For
8 Michigan is a business-friendly state 2012, that score has risen to 5.0.
7 Sample comments:
• ―Michigan is a great state and we are
6.1
proud to call it home.‖ – Executive, tool
6
5.4 and die manufacturer
5.0
5 4.7 • ―Michigan is a great state to bring people
4.5
into for livelihood.‖ – Chairman, baked
goods manufacturing and distribution
4 3.7 company
3.3 3.2
• ―Under Governor Snyder, the business
3 climate in Michigan is rapidly improving.‖
– Director of Business
Development, commercial heavy
2
equipment manufacturer
1
2009 2010 2011 2012
(1 = “Strongly Disagree”, 10 = “Strongly Agree”)
5. 3 Plans Expand in Michigan Manufacturers in Michigan are committed to
the state. The score for planning to remain in
Rate your level of agreement with the following statements: Michigan moved up from 7.9 in 2009 to 8.9 in
10 2012. And companies are not only
staying, they‘re planning to expand in
Michigan, as demonstrated by the rise in
9 8.9 scores from 4.4 in 2009 to 6.6 in 2012 for
8.6
Michigan expansion. In
7.9 8.0
contrast, manufacturers are less likely to look
8
to expand globally, perhaps due to an
improved business climate in Michigan.
7 6.6
Sample comments:
5.8 5.8 • ―This year we plan to increase our regional
6
exposure, increase our Michigan customer
5.2 base by 10-15%, diversify our customer
5 4.6 4.6
base, and add 1-2 aerospace OEM or tier
4.4 5.0 1 customers.‖ – Executive, fabricated
metals products manufacturer
4
• ―We plan to build on the new momentum
in Michigan to help drive the state back to
3 Our company plans to remain in Michigan economic strength.‖ –
Director, Government Relations, electrical
Our company plans to expand in Michigan equipment manufacturer
2
Our company is actively looking to expand globally
• ―We want to gain new accounts/customers
1
drawn primarily from SE Michigan.‖
– Sales & Marketing, corrugated
2009 2010 2011 2012
packaging manufacturer
(1 = “Strongly Disagree”, 10 = “Strongly Agree”)
6. 4 Plans to Hire
Do you anticipate hiring additional workers this year?
A full 84% of Michigan manufactures say they
anticipate hiring additional workers in
2012, compared to 71% last year.
2011 2012
Sample comments:
• ―What I see most lately are manufacturers
I call on for tooling looking for experienced
CNC operators. Finding these people
No Yes No Yes seems to be the biggest problem with the
companies that are growing.‖ –
Owner, automotive supplier
16% • ―Our Challenge is in finding enough skilled
29% labor to staff the plant at the current
workload, and beyond to the projected
levels.‖ – Sales & Marketing, automotive
manufacturer
71% 84%
• ―We are struggling to find qualified
employees. We have plenty of plant and
capital equipment capacity; we simply
need more qualified people.‖ – Business
Development, fabricated metals
manufacturer
7. 5 The Impact of Healthcare Costs While the picture has improved for
manufacturers in Michigan, there are still
areas of concern. As manufacturers strive to
How much impact do you expect the following costs will have on your company's operational remain competitive in a global
performance? market, healthcare costs are still a big
concern. Consistent with last year‘s
findings, manufacturers‘ score for the impact
8.9
Healthcare costs of healthcare costs on operational
8.9 performance eclipse the scores for several
other cost categories—
labor, energy, tax, regulatory, and capital—as
7.9
Labor costs the costs that have the highest impact on
7.9
company operational performance.
7.4
Sample comments:
Energy costs
7.6 • ―Healthcare costs continue to
increase, and are painful to pass on to our
employees.‖ – Executive, machinery
7.3 manufacturer
Tax costs
7.4
• ―The cost increase in Medical coverage is
explosive. Our increase this year was
6.7 larger than the past few years combined.
Regulatory costs
6.9 This is with a healthy workforce with a
favorable claims experience.‖ –
Controller, paper products manufacturer
1 6.6
Capital costs
6.5 • ―Health care cost increases are greatly
surpassing our ability to cover those
increases.‖ – Executive, non-automotive
2012 2011 manufacturer
(1 = “No Impact”, 10 = “Very Strong Impact”)
8. 6 The Impact of Taxes
Michigan manufacturers scored business
How much do the following business tax issues impact your company's overall competitiveness? income tax (7.6), unemployment
compensation (7.5), and personal property
7.6 tax (7.3) as the most important tax issues
Business income tax
7.4 impacting their company‘s overall
competitiveness. This is consistent with the
7.5 findings from the 2011 outlook survey results.
Unemployment compensation
7.4
Sample comments:
7.3
• ―Companies will finally be able to adjust to
Personal property tax
6.8
a more stable state tax system!‖
– Director, Government
Relations, electrical equipment
6.9 manufacturer
Real property tax
6.9
• ―We have high taxes with no help. Small
6.9
business is growing but lost in the
MBT Surcharge
6.9
automotive picture in Michigan.‖
– Executive, plastics and rubber products
manufacturer
5.8
Gross receipts tax
6.3 • ―What the Snyder administration has done
regarding the simplification of the business
tax system in the State of Michigan is a
1 5.1
Sales and use tax huge step forward.‖ – President and
5.2
CEO, machinery manufacturer
2012 2011
(1 = “No Impact”, 10 = “Very Strong Impact”)
9. 7 An Emphasis on Strategy Among a list of management emphases that
companies can emphasize, Michigan
manufacturers score strategic planning (8.4)
How important are the following management tools for your company's success? as the most important for their company‘s
success. According to the respondents, the
Strategic planning 8.4 importance of strategic planning is even
8.1 greater than a number of other critical
components of a manufacturer‘s
Market diversification 7.9 success, such as market
7.8
diversification, employee training, product
innovation, and market research.
Employee training 7.8
7.4
Sample comments:
Product innovation 7.6 ―My goal for 2012 is achievement of
7.4
operational and technical improvements and
developing and implementing a strategy for
7.0
Market research
7.2 growth.‖ – Director, Continuous
Improvement, pharmaceutical ingredients
6.8 manufacturer
Strategic collaboration
6.5
―I‘m focusing on customer relationship
Business model innovation 6.4 building and execution of our strategic
6.0 business plan.‖ – President, transmission and
power train parts manufacturer
Developing global markets 5.8
5.6
―We are working to increase sales and
profitability, refine our market position, exploit
Developing a global supply chain
1 5.1
4.8 our market strengths, review strategic
partnerships, and push the speed of product
development.‖ – CEO, machinery
2012 2011 manufacturer
(1 = “Not at all Important”, 10 = “Extremely Important”)
10. 8 Increased Collaboration with Michigan Organizations Organizations like MMA, the MEDC, local
manufacturing groups, and colleges and
universities can be rich sources of assistance
How important have the following organizations been to your company's success in Michigan? for Michigan manufacturers. And while
manufacturers give low scores overall for the
Michigan Manufacturers Association (MMA) 6.1 importance of these organizations for a
6.1 company‘s success, the numbers are up from
2011. Greater collaboration within the state
Michigan Economic Development Corporation (MEDC) 5.3
4.9 is on the rise, though there is clearly much
room for improvement.
Local manufacturing groups 5.1
5.3
Sample comments:
Colleges and universities (4-year) 4.9 • ―Better university collaboration on
4.7
technology transfers would be helpful.‖
4.9 – President, transmission and power train
Community colleges
4.3 parts manufacturer
Regional/local chamber of commerce 4.6 • ―We are developing a training curriculum
4.3
‗university‘ for new and existing team
4.5 members. And we‘re working with local
Michigan Manufacturing Technology Center (MMTC)
4.1 high school administrations, career
counselors, etc. to help students see the
National Association of Manufacturers (NAM) 4.3 opportunities for jobs in manufacturing.‖
3.8
– Executive, fabricated metals products
4.0 manufacturer
State chamber of commerce
3.8
• ―MMA is a key facilitator between
U.S. Chamber of Commerce
1 3.4
3.3 manufacturers and the regulators. Their
contributions are very much appreciated.‖
– Director, energy equipment
2012 2011 manufacturer
(1 = “Not at all Important”, 10 = “Extremely Important”)
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