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2024 Manufacturing Survey Results: Riding the Roller Coaster

Jan. 23, 2024
Our Manufacturing Outlook Survey shows optimism has risen for 2024, but labor shortages and tempered capital spending budgets could put the brakes on growth.

Confidence simply won’t stabilize year-over-year for the food & beverage industry, with the roller coaster ride of optimism continuing into 2024, as displayed in our annual Manufacturing Outlook Survey. This time around, optimism is up some 7 percentage points from last year, with two-thirds feeling somewhat (47%) or very optimistic (20%) as we begin the new year.

This is simply the latest upswing the industry has been on since the Covid-19 pandemic (optimism has zigzagged from 58% in 2021 to 72% in ’22 to 60% for ’23). Yes, all of those show more than half the respondents feeling fine, but business forecasting could use the breather afforded by more stability, particularly for a consumer staple type of industry.

All that said, maybe the better snapshot of the improved optimism is the lack of pessimism: The percentage of respondents who feel somewhat or very pessimistic heading into 2024 dropped to 6% from 9% last year. Backing up the “less pessimism means more optimism” argument were the expectations for 2024 plant production levels. When asked to anticipate plant production increases/decreases for 2024, only 3% expected any sort of decrease, compared to 6% a year ago.

For those “glass half empty” types, however, anticipation of increased production did slide from 76% last year to 69% this year. Only 33% expected an increase in production of 10% or more (last year, a whopping 48% expected that sort of increase for their plant).

Expanding their view out to their entire company, only 3% said they’d be consolidating production through mergers or closures of lines or plants — way down from the 14% that responded similarly last year. Production capacity increases through additional lines and plants were expected by 36%, while 30% believed their companies would maintain status quo in 2024.

 

A focus on food safety issues

Food safety continues to be the primary concern at most processing plants, with 47% choosing it as their No. 1 issue, well ahead of automation, which ranked first for only 18% of respondents. Food safety, cost control and automation were the top three issues heading into 2024. At the other end of the spectrum, respondents said they are far less worried about issues with sourcing ingredients, packaging and other supplies, and inflation/price increases this year.

Interestingly enough, as the industry works its way through the era of corporate social responsibility reports, sustainability issues ranked fourth most important, but (the more-specific) energy efficiency was the fourth least important.

Given the opportunity to add issues not listed in the answers, at least 6% of respondents listed employee retention challenges (improving turnover rates, paying employees more, giving them more time off), training and capturing the years of knowledge of workers headed for retirement and sharing it with the new generation of workers.

One respondent mentioned their company was concerned about finding an alternative to Red FD&C No. 3, which was banned in California this year. Another company mentioned its search for an alternative to single-use plastics would weigh heavily in 2024.

On the facility front, one respondent believes capital improvements in the wake of inflation were of concern to their company, while another said the rising cost of wastewater treatment and facility infrastructure upkeep are issues that need to be addressed as soon as possible.

Capital spending predictions appeared more tempered this year, with just 23% expecting those budgets to rise this year, and 5% anticipating smaller capex monies for plant projects. Meanwhile, the types of projects has shifted, with respondents saying control systems, digital devices (such as sensors and meters), electronic records and packaging equipment would likely be the focus of capital spending. Expansion and upgrades to facilities, and software improvements ranked lowest on the list this year.

With regard to equipment, fewer respondents complained of problems with getting parts on time or long delivery wait times this year than last. However, both issues still were tagged by about half of the respondents, so the industry has some work to do in this realm.

Laborious shortage of labor

The battle to find enough workers to operate facilities and maintain production continues, and our survey shows that labor issues have not eased for the food & beverage processing industry. More than 90% of those surveyed answered our question asking if worker shortages were as critical as reported.

Only 16% said they were not having trouble filling plant jobs. Fewer than that (11%) said that things haven’t really changed for them — that it has always been bad. Meanwhile, 30% replied that labor shortages have been critical, and it was impacting their plant’s production. For the remaining 43%, finding workers to fill plant floor jobs was harder than it had been in the past, but the companies seemed to have some sort of plans in place, as they were working through it.

We then asked how their organizations were addressing staffing needs, and offered a list of seven options, plus an “Other” option (and the ability to comment and tell us what they were doing). Respondents were allowed to check any and all that applied to their situation. Three courses of action stood out in the results.

More than half (51%) said they were recruiting maintenance technicians, with 34% hiring more line operators for semi-automated tasks and 30% expanding in-house technical training. Only 17% said their company was adding in-house engineering capabilities, 15% were working with schools to develop electromechanical curricula, and 12% said their organization was outsourcing more job functions. Interestingly, 16% of respondents said their company/facility was not addressing staffing needs.

One respondent commented that retaining highly qualified staff and leadership at the plant level was difficult, particularly when it came to the youngest workers (25 years old or younger). Their facility, they said, pays a significantly higher hourly rate than other companies in the area.

Other strategies mentioned in the comments included adjusting staff hours to attempt to improve attendance, using more temporary workers, installing more automation and using a mechanics apprentice program to offer an associate’s degree to those who complete the program.

More than half of respondents (55%) said their organization was adding on-the-job training programs to expand maintenance workers’ skill sets in order to effect change and optimize asset use.

All this said, the outlook for workforce growth in 2024 looks similar to last year, with one significant difference: For many more respondents, the crystal ball isn’t too clear. This year, 15% of respondents did not know what their plant’s plans were for staffing going into the New Year (compared to 5% last year).

However, it’s worth noting that, among those who were privy to the facility’s plans, only 5% said their plant was expecting to reduce staffing (actively or through attrition), down from 13% at this time last year.

The percentage of plants that planned to maintain staffing levels or add to the workforce stayed virtually the same as last year. Yet, at least one respondent is concerned that no matter what organizations do to recruit, train and retain workers, they’ll be fighting an uphill battle until the workers’ attitudes change.

“Most of the people we hire have the attitude of wanting a paycheck without working for it,” the respondent said. “We offer great benefits and pay. Most of the new hires just don’t want the pay. The government pays them too much to stay home and not work. So they have the attitude that they don’t have to work.”

One thing is clear: The industry needs them to work and needs to continue to address the disconnects about food & beverage careers to keep processing plants up and running, producing safe foods and beverages, and feeding the world.

About the Author

Andy Hanacek | Senior Editor

Andy Hanacek has covered meat, poultry, bakery and snack foods as a B2B editor for nearly 20 years, and has toured hundreds of processing plants and food companies, sharing stories of innovation and technological advancement throughout the food supply chain. In 2018, he won a Folio:Eddie Award for his unique "From the Editor's Desk" video blogs, and he has brought home additional awards from Folio and ASBPE over the years. In addition, Hanacek led the Meat Industry Hall of Fame for several years and was vice president of communications for We R Food Safety, a food safety software and consulting company.