by Blair Vandivier
President and CEO
Part of my job is to anticipate the future and like the captain of the ship, steer a course that avoids turbulence as much as possible. Unfortunately, in business there are few adages such as “Red sky at night, sailor’s delight; Red sky at morning, sailor take warning”. As a result, organizational leaders must keep a watchful eye to spot those trends which affect their industry.
One of the benefits of travel, whether by air or car, is the isolation which allows the mind to freely flow. Occasionally, these episodes provide an opportunity for reflection. On a recent journey, I noticed six trends emerging in the metal finishing industry, summarized below.
Each trend is further discussed by clicking here.
- Managers are Increasingly relying on data. Increasingly, metal finishers are no longer making decisions on the basis of “gut” feeling or aesthetic appeal. Finisher’s want data. Objective decision making has replaced subjective. Read more.
- There is less “grey hair” in the workforce. The old guard is retiring. According to AARP statistics, there are over 10,000 people in the US turning 65 each day! While not everyone retires at 65, as more and more workers reach retirement age, their replacements tend to be younger and less experienced. Read more.
- There continue to be shortages in the labor supply. According to the Bureau of Labor Statistics, the US unemployment rate in January, 2019 was 4%. Even though the labor participation rate is up, unemployment remains at historical lows. Read more.
- Isolationism and tariffs are having an impact. The cost of imported goods subject to tariffs seems to be causing an expansion of US manufacturing activities. Combined with some favorable tax considerations many manufacturing operations are expanding fabrication activities. Read more.
- The pressure for “green” processes and operations continues. The challenges surrounding PFOS and PFAS usage continue. The problems of Flint, Michigan have increased public awareness of chemicals in the water supply. Read more.
- Inflation may not be the menace it was thought to be. The new normal is a relatively modest rate of interest—very modest to those of us who remember 20+% interest rates! Even with these rates, leverage can still be a problem. We are starting to see the first signs of problems in some of our client’s receivables. This may just be an isolated instance, or it may be an early sign of some issues in the larger economy.
While 2019 looks to be another good year for the finishing industry, the water is not completely placid and we may encounter some storms on the voyage. Like any good sailor preparation and a watchful eye on the horizon will help us avoid calamity.