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What Unique Challenges Face Middle Market Manufacturers in 2018?

By Generational Equity

07/05/2018

While the majority of middle market manufacturers feel the economic climate has improved dramatically, new market complexities are creating additional challenges which they may not be prepared for.

According to a report recently released by the National Center for the Middle Market at Ohio State University, 86 percent of middle market manufacturers feel the business environment is more competitive than it was five years ago.

The report surveyed 250 decision-makers from middle market manufacturing companies, evenly split between component parts manufacturers (CPMs) and original equipment manufacturers (OEMs). The goal was to better understand the business environment and challenges that these companies face.

Growing Challenges for Middle Market Manufacturing Firms

Other key points revealed by the survey are:

  • The company leaders surveyed felt the overall business climate for middle market manufacturing has improved significantly since 2015.
     
  • These businesses and the manufacturing industry as a whole have seen steady growth in both revenue and employment in the last three years.
     
  • Challenges such as globalization, customer consolidation, scarcity of talent, and rising costs pose significant challenges to numerous manufacturing firms’ continued success.
     
  • Investments in technology, tighter relationship management upstream and downstream in the value chain, and innovations to each company’s product and service mix offer the best chances for future growth.
     
  • Financial challenges, new competition, workplace safety, cybersecurity, regulatory and political uncertainty, and workforce development issues are mixing to create a more complex market than ever before.

The report compares responses from manufacturers in the middle market as a whole, the fastest-growing companies, OEMs and CPMs.

If you are interested in learning more about the landscape for middle market manufacturing companies, you can read the full report: How to Thrive in a Transforming Environment.

For many of you reading this, the challenges facing your organization may outweigh the growth opportunities available to your firm.  If so, it might make sense to explore your exit planning options with Generational Equity.  Over the past several years no M&A advisory firm has helped more business owners successfully exit their companies than we have. If you are ready to move forward, please reach out to us at 972-232-1121 or visit our website and provide us with your contact information and we will be in touch.

By Jessica Johns Pool

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