Connecticut Seeing Some Recovery in Manufacturing Sector Due to Leaner, More Efficient CompaniesJuly 11, 2011
While the state’s economic recovery remains slow, some encouraging news has been seen lately in the Connecticut manufacturing industry, where modest increases in job growth have been seen in 2011 for the first time in several years. While this is by no means a call for celebration just yet, it does make for a more optimistic manufacturing outlook than we’ve seen in quite a while.
Connecticut’s proud manufacturing base has taken numerous hits in recent years and, according to published reports, reached an all-time low in jobs in early 2010. A recent report from the Federal Bureau of Labor Statistics, though, showed a slight increase in job growth from 2010 to 2011, and signs for future progress remain encouraging.
This is due largely to Connecticut-based manufacturing companies adapting well to the economic downturn and increasingly international market. Manufacturers realized that they simply had no choice but to take a hard look at their workforces and scale back where necessary. This translated to efficiencies in their operations and increases in productivity that employers have been able to sustain as demand has increased. It also helps that companies are better managing their inventories and allowing for more cash to be freed up for re-investment. Now these companies are predicting some growth and as a result, more confidence in expanding their workforce. This is the pattern that companies here in Connecticut are going to want to follow in order to allow the state’s manufacturing base to continue making a comeback.
We have noticed with many of our manufacturing clients that there is a common blueprint for success – companies simply cannot survive in the United States today without making the conscious decision to operate leaner and more efficiently. This is essential to compete with cheaper labor markets, China and Mexico, in particular.
The good news is once such changes are put in place, profitability rises, pay increases become possible, and the health of the company and workforce sees an overall improvement. This is why manufacturing in Connecticut is seeing good news for the first time since before the recession began in 2008.
There are steps that Connecticut manufacturing companies can take to help in this bounce-back, steps that many companies have already taken and should no doubt continue:
Investing in Technology – This is essential. Companies which keep investing in newer technologies are the ones with the best chances of staying ahead of the competition and remaining on the leading edge of innovation.
Employee Incentives – Giving employees a chance to be rewarded for their productivity can also be a major factor in finding future success. Manufacturers need to have their employees invested in the company’s growth.
- Bringing Back Some Jobs – Many companies are trending now towards bringing back jobs that had previously been outsourced. Bringing these employees and functions back in-house can mean better efficiency and more reliable accountability.
The bottom line for manufacturing companies that want to keep this progress going is being able to operate with a leaner, more concentrated workforce. While we are not yet out of the woods, smart investments and better efficiencies have led to increased sales and more consumer confidence.
As a result, the state of the manufacturing industry in Connecticut is better now than it has been in several years, and that is indeed is a cause for some optimism.
Janet Prisloe, CPA, is a partner with BlumShapiro and leads the firm’s Manufacturing/Distribution Industry Group. BlumShapiro is the largest regional accounting, tax and business consulting firm based in New England, with offices in West Hartford and Shelton, CT and Rockland, MA. The firm serves as business advisors for today’s leading companies, non-profit organizations and government entities, working to strategically tailor and consistently deliver tested solutions for unlocking an organization’s full potential. For more information about BlumShapiro, visit blumshapiro.com.