KEY 2019 PLANNING CONSIDERATIONS
As we look ahead to where we would like to be in 2019, we should first reflect on what happened last year and how it affected business, then examine our preparation for the unexpected in 2019 and beyond. For manufacturers, 2018 was a year of growth tethered by tariffs that were more damaging in rhetoric than in actual application. The year began with threats of trade wars that instantly hit our pocketbooks, well before any tariffs were enacted. Creating an even playing field did help bring work back to the United States and helped to keep our products on par with other global providers, but the bottom line is still the bottom line and its degree of success in the long strategy of the tariff game can only be told by time. For now, upfront cost increases have been passed down to the end user and overall balance has been restored until the next batch – which means any future forecast based on current status is out of our hands and we must prepare for every possible scenario:
- Will tariffs cause more prices to increase or shift the advantage to another location?
- When will the next recession hit?
- How long will the next recession last?
- Where am I going to find labor for all the new work?
These questions are endless and make building a long-term strategy difficult, especially alongside an ever-moving forecast. That said, shops can prepare for many things in different ways to secure strength for the future. The economy is strong, the labor pool is depleted, pressrooms are busier today than yesterday, but talk still circles back to a looming recession. Even if economic experts are correct about a pending downturn, metal stampers should be in good shape for growth in 2019 – numbers are expected to be less than 2018, but still positive until a forecasted slowdown begins in 2020.
For many companies, business is strong and somewhat stable at the moment, so taking the time to prepare for future needs is difficult to fit into their daily grind. But preparation is a necessary step for future survival – and 2019 is the year to get prepared. The tax cuts at the beginning of 2018 allowed those companies to spend a little more on capital needs in preparation for the next influx of business, so what better way to make the most of the extra business and tax-cut cash than to spend more time looking at value over cost. Implementing new ideas is not without risk, but waiting on the sidelines can keep a company out of the game. Creating the most of today, while planning for the future – when business is strong – will make surviving and succeeding tomorrow a lot easier. Finding the right mix of labor and technology is paramount to success in this new economy of metalworking.
Read the full article as published in Fabricating & Metalworking.