industry pulse - accounting tax and audit | advisory
TRANSCRIPT
2021 Q1 MANUFACTURING & DISTRIBUTION SURVEY RESULTS
In 2020, manufacturers and distributors learned how to adapt to an unprecedented global pandemic. This year, they’re taking those lessons learned and positioning their companies for growth in a redefined marketplace (though, growing pains are inevitable).
In the Sikich Industry Pulse, our optimism index shows industry executives are hopeful about the coming six months. Their hope is coupled with the reality of continued hiring challenges and a heightened focus on validating and protecting their data. To overcome these challenges, I urge industry leaders to embrace automation, adopt innovation and challenge the status quo.
We’re challenging our own status quo by committing to survey the manufacturing and distribution industry multiple times throughout 2021, providing real-time data for our clients and colleagues.
Stay tuned!
JERRY MURPHY CPA, CMA, CGMA
PARTNER-IN-CHARGE, MANUFACTURING & DISTRIBUTION SERVICES
In March 2021, Sikich surveyed more than 120 manufacturing and distribution executives from across sectors and the nation.
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INDUSTRY EXECUTIVES FAIRLY OPTIMISTIC ONE YEAR
AFTER PANDEMIC SHOCK.
Stay tuned for regular updates to our industry optimism index for trend data.
DESPITE NATIONAL UNEMPLOYMENT RATE, FILLING OPEN POSITIONS
STILL A CHALLENGE.According to the U.S. Bureau of Labor Statistics, “The [national]
unemployment rate edged down to 6.0 percent in March. The rate is down considerably from its recent high in April 2020 but is 2.5 percentage points
higher than its pre-pandemic level in February 2020.”
3%1% 2% 1%
8%
14%
31%
26%
10%
5%
1 2 3 4 5 6 7 8 9 10
OPTIMISM ABOUT BUSINESS PROSPECTS IN THE NEXT 6 MONTHS
56%OF RESPONDENTSPLAN TO INCREASE THEIR WORKFORCE IN THE NEXT SIX MONTHS
But only 5% are completely confident in their ability to obtain the talent required
Level of Optimism (1 = not optimistic at all, 10 = extremely optimistic)
3
UNCERTAINTY LOOMS OVER EMPLOYEE RETENTION CREDIT.
BACKGROUND: The Employee Retention Credit (ERC) was designed to provide an incentive for employers impacted by the pandemic to retain their workforces. Different than the Paycheck Protection Program Loans, the ERC aims to provide payroll tax credits that could be realized immediately by employers if they met various requirements.
BUSINESS SALES ALREADY ON THE HORIZON? SUCCESSIONS PLANS
LARGELY UNCHANGED BY PANDEMIC CONDITIONS.
70% of respondents said their business succession plans remain the same, and our experts want to know more.
“ We’ve seen plenty of manufacturing companies considering or actively selling part or all of their business in the near future and have to question if those sticking with pre-pandemic succession plans already had a sale or tuck-in in their sights because the M&A market is hot.” – SIKICH EXPERTS
4%
7%
6%
13%
70%
Moving up plans by 3-5 years
Moving up plans by 1-2 years
Delaying plans by 3-5 years
Unsure
Plans remain the same
0 10 20 30 40 50 60 70 80
SUCCESSION PLAN SHIFTS AS A RESULT OF PANDEMIC CONDITIONS
of manufacturers and distributors don’t plan to take advantage of or are unsure if they qualify for the credit
4
ROOM FOR IMPROVEMENT IN USING AND PROTECTING DATA.
Nearly ¾ of executives are fairly or completely confident in using their existing data to make business decisions
More than half of manufacturers and distributors experienced at least 2 information security events in the past 12 months.
TOP-REPORTED INCIDENTS:
“ We’re most alarmed at the amount of ransomware events the industry experienced. A ransomware event has a lot of lasting ramifications, from permanently losing critical data to exposed sensitive customer and employee data to paying a hefty ransom to recover the data – these attacks are no joke.” – SIKICH EXPERTS
81% 42% 9%EMAIL PHISHING
SCAMSRANSOMWAREUNEMPLOYMENT
FRAUD
DATA CONFIDENCE
32%
40%3%
11%
14%Somewhat confident
Slightly confident
Not confident at all
Completely confident
Fairly confident
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