Three Pandemic Facts that Bode Well for Small Manufacturers
As we near the one-year mark of the coronavirus pandemic, data and statistics are beginning to roll in. Some statistics are exactly what we all thought they’d be: evidence of the pandemic’s massive burden on the manufacturing economy. But there are silver linings beginning to come out, as well. Manufacturing hasn’t fallen off the cliff most predicted it would and, in fact, could be entering a fortuitous period, depending on the sector. Many small manufacturers are seeing positive trends, and we’ve got the data that proves it.
This isn’t to downplay the catastrophic disruptions manufacturers have faced in 2020. Rather, we’re looking at opportunities for small manufacturers at a time when factors like employment, reshoring, supply chain decoupling, and factory digitization are playing in favor of domestic producers.
47% of manufacturers report revenue growth during COVID-19
For manufacturers with the ability to pivot, the pandemic has unlocked new and exciting revenue growth opportunities. Nearly half of producers saw revenue growth during the pandemic, though it’s unlikely to immediately offset the lost revenues and sudden expenditures at the outset of the pandemic. What’s more important is the capacity of these new revenue streams to translate over into a post-pandemic industry.
Part of the reason for this is increased domestic demand due to decoupling of supply chains. And although this figure is inflated due to sector-specific demand, it’s nonetheless representative of the powerful opportunities that exist in the future for small manufacturers with the ability to stay agile and pivot accordingly.
New business formations declined in spring, but still outpace recent years
According to research from the Brookings Institute, new business filings saw a decline of 4.4% in June, down from June 2019. However, by mid-August, the total number of new business formations was up nearly 56% for the same time period last year.
While it’s uncertain what caused the spike, according to the Brookings Institute, “there is some evidence that business creation has been boosted by demand for new kinds of goods: our analysis shows that many states with heavy manufacturing bases have seen the fastest rebounds.” Opportunities abound for small and up-and-coming producers!
Almost 70% of manufacturers expect a recovery time of three to 12 months
Visibility in the face of uncertainty is important, and part of what guarantees a manufacturer’s success. In the early stages of the pandemic, visibility was nonexistent. Now, a year in, almost three-quarters of manufacturers can see a clear course to recovery. For smaller producers especially, the road to recovery is properly illuminated.
Industry is slowly inching toward pre-pandemic levels. As a bulk of manufacturers see their rebound over the next year, they’re growing in confidence and looking for ways to not only recover, but grow beyond pre-COVID-19 levels.
Global trends align
The good news for manufacturing’s smaller players isn’t a fluke — it’s mimicked by world data depicting much the same evidence. Industrial production is slowly increasing month-over-month in Europe, and data seems to indicate that the worst disruptions are behind us. For small producers looking for an opportunity to develop a foothold, the time is now.
