For years, there’s been a persistent concern about the offshoring of manufacturing from the US, with a 35% decrease in domestic manufacturing jobs over the last 40 years.
More recently however, there has been growing sentiment to “reshore” manufacturing, particularly with how apparent the risks and vulnerabilities of offshoring have become during the Covid pandemic – from shortages of personal protective equipment to temporary shutdowns of automotive production lines due to the lack of parts. And there have been challenges like these across the entire economy that touch every industry.
Meyer’s rigging and commercial teams work with dozens of large manufacturers across the Northeast to install their machinery as well as to upgrade or relocate their entire facilities. In our work with clients, we hear and see firsthand what these companies are planning and the challenges they face.
We recently sat down with Rob Sebastiao and Eddie Hyrniewicz, two leaders from our rigging group, to hear their observations about the state of manufacturing in the Northeast. Here are some of the highlights from the conversation:
Many are planning for growth
While many of our manufacturer clients see great potential in reshoring key capabilities and are planning for the associated growth that will accompany it, most are also delaying capital investments until conditions become more clear. We hear from many about how challenging it is to forecast more than a few weeks out at this point. Some businesses have thrived during the pandemic (medical manufacturers, in particular) and are moving to new facilities or upgrading older equipment to keep up with demand, but so far, this is the exception.
Hiring is the biggest hurdle to growth
Nearly every manufacturer we serve is struggling to find talented employees to hire, with many saying they simply can’t find trained employees to man their machines. In fact, a recent CBIA survey found that nearly 90% of manufacturers in Connecticut are struggling with hiring and retaining employees. While this is a current concern, when demand begins to strengthen, this lack of trained employees is envisioned to be the biggest hurdle to future growth.
To address these big challenges to growth, Meyer is helping clients in a number of ways. First, to address the skilled labor shortage, we’ve helped a few educational clients build out manufacturing training facilities. For example, our rigging team recently built two CNC facilities for Western Connecticut State University where they will train the next-generation of skilled machinists. For others, we’re helping update facilities to manage current demand and prepare for what’s coming. Recently, our rigging team designed and implemented a customized solution to integrate new heat exchangers into the crowded ceiling of a high-tech facility. Our solution required a combination of creative problem-solving and an old-school manual installation, but the approach we pursued allowed this facility to upgrade its infrastructure without disrupting workflow or productivity.
Preparing for What’s Next
The wave of manufacturing reshoring seems to be building and preparing your facilities and equipment for this next chapter will be a key factor of success. If you are looking to plan for growth or need to update your manufacturing facility in the coming months, we’re here to help.