Southfield, Mich. — One in four manufacturing companies would have lost money or merely broken even in 2020 without government help, a new survey reports. But respondents also say they have a better outlook for this year.
Harbour Results Inc. (HRI), a manufacturing industry consulting and benchmarking company, said its Q1 2021 Harbour IQ Manufacturing Pulse Study indicated 25 percent of respondents needed the Paycheck Protection Program in the U.S. or the Canadian Emergency Wage Subsidy to avoid red ink or no profit last year.
"The industry seems to be rebounding in 2021 after a difficult 2020 — sentiment is up, capital spending is planned and utilization has increased, all pointing to a healthier industry," HRI CEO Laurie Harbour said in a statement. "Although this is positive news for manufacturers, there is a great deal of room for improvement as efficiency is declining, overall revenue fell, and profitability was achieved through PPP and CEWS."
Overall industry optimism for 2021 has reached 2019 levels, the Southfield-based group said.
Labor is a "top concern" for manufacturers followed by raw material pricing and employee health care, HRI said.
The company surveyed more than 300 manufacturing facilities, including 23 percent that are mold making shops, 27 percent that are plastic processors, 29 percent that are involved in stamping and metal forming and 10 percent that are die builders.
Debt also remains low among the respondents.
"Thanks to the economic growth of the last decade, owners in this industry have used their proceeds to pay down debt and invest in the business," Harbour said. "The average debt/equity for most of the respondents is 0.5 or less. There was a time in memorable history when the averages were over 1."