Manufacturing is in a strange place these days. Post-pandemic, production boomed as companies struggled to meet pent-up demand, replenish depleted inventories and source domestically. Then the brakes came on in late 2022 as inflation and recessionary fears resulted in 14 consecutive months (through 2023) of contracting manufacturing activity nationwide, according to the closely watched PMI index from the Institute for Supply Management, despite the recession never materializing, the stock market reaching new highs and the economy growing at over 3% annually. This juxtaposition is occurring against a backdrop of dramatic technological change and challenging demographics that continue to make workforce the number one challenge for manufacturers. So, what can manufacturers expect in 2024?
Tech Hub Opportunities: There ARE manufacturing sectors that are doing very well, often due to Federal legislation/funding for defense, infrastructure, clean energy and semiconductors. Manufacturers in WNY and statewide stand to benefit from these efforts, after two New York groups won “Tech Hub” designations from the U.S. Economic Development Administration (EDA) for semiconductors and batteries (out of 31 designations nationwide). We can now apply for up to $75 million in funding from EDA (5-10 awards expected) to support each of these efforts, including helping manufacturers in WNY and statewide to become part of these supply chains.
Workforce Struggles Continue: Manufacturing and other industries will continue to struggle with finding and keeping workers as the Baby Boomers retire and the percentage of the U.S. population over 65 climbs toward 20%. This pressure has driven manufacturers in WNY and everywhere to innovate everything from their culture and worker engagement to their outsourcing and technology deployment strategies. It will also drive public sector efforts in training, similar to Buffalo’s own Northland Workforce Training Center which is tapping into underutilized labor pools.
Technological Change Accelerates: New technologies such as artificial intelligence (AI), Big Data and additive manufacturing have been reshaping manufacturing and other industries. This trend will seem to accelerate, not because of the introduction of new technologies (which will continue), but because of technology convergence as manufacturers start to connect these technologies, magnifying their impact and driving exponential improvements in performance. In WNY, Buffalo Manufacturing Works will continue to be a competitive asset, helping local manufacturers understand, access and deploy new technologies through programs like SHIFT2.0.
Energy Comes to the Fore: The drive to decarbonize has spawned new legislation and policy that will force manufacturers in WNY and everywhere else to grapple with energy issues in 2024. In New York State, the Climate Leadership & Community Protection Act is an example of the kind of legislation that will drive manufacturers to maximize their energy efficiency and deploy alternative energy options such as solar power. It’s not too early for manufacturers to take advantage of subsidies and tax breaks to reshape their energy sourcing and usage to navigate this sea change. In WNY, programs like ARC ARISE (Appalachian Region Initiative for Stronger Economies) offer funding through Insyte Consulting for education and grants for manufacturers in Chautauqua, Cattaraugus and Allegany to improve their energy efficiency and to manufacture energy-related products.
Change is the only constant. Manufacturers who take the initiative and are proactive will succeed.
