Its not just the Patriots who had a great end to 2014! The U.S. auto industry had quite the year as well. Not only did Americans buy 16.5 million vehicles—making it the strongest year for the US auto industry since 2006—they also accounted for $526 billion in revenue in new vehicle sales (which is an 8% increase from a year prior). To get manufacturers’ perspective on how a strong 2014 will effect the industry moving into 2015, we turn to Pricewaterhouse Coopers’ Manufacturing Barometer study for the fourth quarter of 2014. The survey, which is based on interviews with 60 senior executives from large, multinational U.S. based manufacturing companies, shows U.S. manufacturers are planning to increase both hiring and capital spending in the new year. Specifically:
- 60% plan to add to their workforce over the next 12 months, up from 52% who said so in the third quarter.
- 43% plan to increase capital spending over the next 12 months, up from 36% who said so in the third quarter.
- 82% said they plan to increase operational spending over the same period, up from 69% in the third quarter and up from 73% in the fourth quarter of last year
- 57% of manufacturers told PwC their companies are at full operating capacity (based on personnel and operating resources.) That compared to 41% who said so in the third quarter, and 35% who said so in the fourth quarter of 2013.
- 68% said they are optimistic about prospects for the U.S. economy over the next 12 months, up from 57% in the third quarter.
The most popular items for which manufacturers are increasing operating spending, according to the survey, are “the introduction of new products or services, research and development, information technology, and geographic expansion.” Going hand in hand with the increase in operations, the US auto industry also made great gains in terms of its workforce—routinely adding factory shifts and hiring workers. According to the Center for Automotive Research, employment in the US auto industry rose by 47,700 employees last year, a 7% increase over the prior year. With such high hopes and optimism for U.S. economic prospects—the numbers are in favor of a very successful 2015.
However, the discussion of plans to increase hiring brought to light a more troubling trend in the manufacturing industry— a lack of qualified candidates. Many of the survey participants appeared concerned about their prospects for finding new workers with the required skills. Two thirds of manufacturers said they have open positions they are unable to fill with experienced or skilled employees. It’s an issue that effects all manufacturers, so its up to all manufacturers to address this issue as a community. Industry advocacy, youth outreach, and STEM education initiatives are crucial to see the industry continue to grow. Check out AMT’s Smartforce initiative for more information.