The industrial economy is showing a number of positive signs. Nearly half of companies expect higher sales in 2013 than last year. Engineers are working on more projects and companies are focused on expanding sales to new markets. Yet there are no equivalent positive dynamics showing up in company budgets. Sales and marketing spending is flat and hiring is sluggish.
IHS GlobalSpec conducts an Economic Outlook Survey every year to determine the state of the industrial economy. Engineering, technical, manufacturing, and industrial professionals are asked questions about their company’s revenue projections and areas of focus and concern, as well as individual factors such as workload and job satisfaction.
This survey represents the audience you must connect with, and the economic conditions you must operate within. IHS GlobalSpec developed a research report that presents the complete results of the survey and offers analysis and advice to suppliers and manufacturers about how to succeed in the current economy. Download your complimentary copy of Economic Outlook Survey 2013: State of the Industrial Marketplace.
Results: positives and negatives
2013 is proving to be a representative year for the industrial economy: some signs are positive, others are not. As mentioned, many companies expect higher sales this year, engineers are working on more projects and new markets are being explored for expansion. All bright spots.
Yet companies are slow to invest more in their marketing efforts and reluctant to hire additional engineers to handle an increased workload.
Simply put, the economy is an era of concern for the majority of companies (58 percent), and that can lead to caution. Nevertheless, in any economy, there are winners, and there is business to be won.
Hot and cold sectors
Sectors with the brightest sales outlook for 2013 are Biotechnology/Pharmaceuticals (64 percent expect higher sales), Instrumentation & Controls (60 percent), and Automotive (59 percent). Among sectors expecting to be down this year compared to last year are Computers, Systems & Peripherals (52 percent); Government (46 percent); Education (41 percent); and Communications (40 percent).
If you sell into sectors that are doing well, ramp up your marketing efforts there to help capture more business. If you primarily do business in lower performing sectors, see if your products and services are a good fit for industries that are doing well. Look for online programs such as online catalogs, directories, banner ads and others that can display your offerings simultaneously across multiple markets.
New markets beckon
Forty percent of companies are increasing sales into new markets, and 60 percent report they are focused on entering new markets. Attention on new markets is to be expected, for several reasons. First, when sales are flat in traditional markets, it’s natural for companies to seek new markets. Second, it’s easier than ever to connect with customers and prospects in new markets through online marketing. With 28 percent of companies reducing travel, market expansion plans may increasingly rely on channels such as online events, which provide all of the benefits of an in-person trade show but without the travel costs and time spent away from the office.
Where companies are spending
It’s a positive sign that in a year when 51 percent of companies are reducing spending, very few companies are reducing spending on components, parts, products and services. In all product and service categories measured, the vast majority will spend the same or more in 2013 compared to 2012. Leading the field are calibration & testing services, electronic components and mechanical components.
Manufacturers are planning for a better future
Industrial companies are investing to put themselves in a stronger position as the economy continues to improve. The majority (54 percent) are spending more time and effort on new product design and development. In addition, 51 percent are researching future projects and 45 percent are engaged in new technology research. While waiting for the future to arrive, companies are becoming more efficient in the near term. Forty-five percent are focusing on increasing production capacity from existing lines, and 44 percent are concentrating on decreasing quality rejects.
Engineers are satisfied—and busy
We asked engineers about their jobs. Ninety-four percent would recommend engineering as a career choice to high school students. That’s a powerful testament to a high level of job satisfaction. It’s a good thing they like their jobs, because they work hard. Forty-six percent are working on more projects in 2013 than they did in 2012. And the extra work may not go away anytime soon, because headcounts are stabilizing. Almost an equal percentage of companies are adding headcount (21 percent) as reducing headcount (19 percent).
Put these results to work
Get your copy of Economic Outlook Survey 2013: State of the Industrial Marketplace. You can use the reported data as a benchmark to measure your company’s activities, and the conclusions and recommendations to plan for the remainder of the year and to adjust your marketing strategy and positioning based on customer behavior and trends in the marketplace.
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What are your observations on the economy and the industrial marketplace? Are you seeing optimism? Caution? Or perhaps it’s a cautious optimism. Share your thoughts in the comments section below.