Supply Chain Disruption is Top Business Challenge

Over three quarters of manufacturers have cited ongoing supply chain disruption as the biggest challenge to their business in the National Association of Manufacturers third quarter Manufacturers’ Outlook Survey.

The survey takes the pulse at American manufacturers. If the latest results are anything to go by, the patient’s prognosis is looking less healthy by the day.

Confidence levels at manufacturers has declined to its lowest level since the fourth quarter of 2020 with only three quarters (75.6%) of manufacturers reporting a positive outlook.

Covid set the disruption in motion, but demographic shifts, climate change and geopolitical uncertainty over the war in Ukraine have kept the volatility churning.

The top challenges that manufacturers cited in the NAM survey were supply chain disruption (78.3%), attracting and retaining a quality workforce (76.1%), increased raw material costs (76.1%) and transportation and logistics costs (65.9%).

Inflation was also highlighted amid concerns that continued price rises would make it difficult to remain profitable. Price rises stem from rising costs in raw material, transport and logistics, wages, and energy.

Despite these challenges, most manufacturers remain defiantly upbeat but realistic about the prospect of an economic downturn.

“Three out of four manufacturers still have a positive outlook for their businesses, but optimism has certainly declined,” said NAM President and CEO Jay Timmons in a press release about the survey.

“The majority of respondents are expecting a recession this year or next, and it’s clear the challenging environment is taking its toll. Manufacturers have shown incredible resilience through multiple crises, but the challenges of inflation, supply chain strains and the workforce shortage are taking a toll,” he added.

The NAM has conducted its quarterly survey of its 14,000 manufacturers for the past 20 years. The NAM conducted this latest survey between 16-30 August 2022.

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