MANUFACTURING INDUSTRY NEWS
March 2021
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RSM US Manufacturing Outlook Index Remains Positive, but Within a Range
The RSM index of manufacturing sentiment is based on surveys conducted by the regional Federal Reserve banks. The proprietary RSM US Manufacturing Outlook Index has been positive for the five months since August 2020, but not significantly so.
In past economic downturns, manufacturing sentiment receded as the recession continued. However, in this recession, manufacturing sentiment revived even as infections and deaths accelerated and job layoffs continued.
The moderation of confidence is most likely the result of both manufacturing sales and durable goods orders remaining lower than historical standards. Given the importance of manufacturing to overall economic activity, that speaks to the need for a stimulus program to accelerate growth of the manufacturing sector.
For more information on the Manufacturing Outlook Index, click
here for the full RSM article and audiocast or contact John Rittichier, CPA at 800.880.7800 ext. 8484 or at
jrittichier@hsccpa.com.
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The Year Ahead in Robotics
The International Federation of Robotics (IFR) recently released the
World Robotics Report 2020, which demonstrates strong expectations of growth in the sales of robotics for both the industrial and service sectors over the next few years.
Coronavirus and its corresponding vaccination rollout will play a large role on the timeline of implementation.
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Manufacturers may consider the implementation of robotics as an opportunity to increase resiliency to certain global factors and macroeconomic shocks, particularly regarding production levels and consistency.
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Technological advancement is expected to continue to improve the margins achievable by robotics implementation.
Industry and location surveys over the 2019 calendar year show the following:
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Asia remains the strongest early adopter; responsible for roughly two-thirds of new robots placed in service during the year.
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New robotics sales in the United States slowed by 17% from the record setting year of 2018, however, this still led to a 7% increase in total operational stock.
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Robotics are predominately reliant on the automotive industry, with electrical/electronic robots in tail. As of report issuance, there was a nearly 50% drop of operational robots from top industry to top industry globally.
For more information on the robotics outlook in the US and globally, click
here for the full Financial Management article, click
here for the full IFR Report, or contact
Brant Kennedy, CPA at 800.880.7800 ext. 1425 or at
bkennedy@hsccpa.com.
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China’s Regional Trade Deal is Latest in Economic Battle with U.S.
The Regional Comprehensive Economic Partnership (RCEP) became the largest regional free trade agreement when signed into effect, encompassing 30% of the world’s GDP. RCEP includes several nations considered strong allies of the U.S., leading many to view the agreement as a move by China to broaden their economic repertoire for future leverage. RCEP is expected to offer minimal direct economic benefit to those involved. Its primary intention is to formalize trade between Asian nations, which will ideally bolster development through both relationships and ease of trade.
It is widely expected that the Biden administration will attempt to rejoin the Trans-Pacific Partnership, but to date, there has not been confirmation from the Biden administration. President Biden has stated he would wait to negotiate trade deals, instead placing initial focus on the pandemic, economic recovery, and investing in American manufacturing and technology.
Analysts expect the RCEP to have more of an impact at the micro level vs. broad economic impact. Some manufacturers may find that savings provided by using Chinese labor outweigh the sum of the risks (most of the indirect cost nature), while some manufacturers may align with the alternative. The implications of any possible tariffs or subsidies are recommended to be monitored by each entity, with the applicability in the short term expected to be minimal for the majority.
For more information on the Regional Comprehensive Economic Partnership, click
here for the full RSM article or contact John Rittichier, CPA at 800.880.7800 ext. 8484 or at
jrittichier@hsccpa.com.
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RSM US Middle Market Business Index: Middle Market Reopening
Nearly half of middle market companies responded to the pandemic by implementing technology in ways they had not before.
The RSM 2021 reopening report provides insights into various ways middle market organizations have adapted during the pandemic, including:
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Making remote work a permanent option for some employees
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Implementing technology in new ways
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Rethinking the role of physical offices and other workspaces
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Enhancing information technology security
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Identifying new ways to retain and attract employees.
Seventy-nine percent of businesses surveyed said they expect a full reopening of the U.S. economy will depend, to some extent or to a great extent, on a significant percentage of the U.S. population being vaccinated.
“Distribution of an effective vaccine, and peoples’ willingness to get the vaccine, will be a major determinant of how quickly the U.S. economy will be able to accelerate into a recovery period,” said RSM US Chief Economist Joseph Brusuelas. “In the meantime, though, middle market companies must continue to adapt by making strategic decisions about investments and using technology in new ways to drive efficiencies.”
For more information on the Middle Market Business Index, click
here for the full RSM article and audiocast or contact Brant Kennedy, CPA at 800.880.7800 ext. 1425 or at
bkennedy@hsccpa.com.
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U.S. Personal Income and Savings: Households are Building Impressive Cash Positions
U.S. Personal Income and Savings: Households are building impressive cash positions
Americans’ personal income took a turn for the better in December, increasing by 0.6%. This increase also attributes to an uptick in the savings rate, to 13.7% from 12.9%. The continued drive of savings, coupled with the increase in personal income, lead RSM experts to believe these conditions will create a strong consumer-led boom in the second half of the year.
The passing of the most recent coronavirus relief package is expected to be a factor, continuing to increase saving rates through the beginning of 2021. As the stimulus expenditures cycle out by the end of 2021, RSM also expects transitory price increases to trend towards more customary levels.
For more information on the U.S. Savings impact and outlook, click
here for the full RSM article or contact John Rittichier, CPA at 800.880.7800 ext. 8484 or at
jrittichier@hsccpa.com.
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Harding, Shymanski & Company, P.S.C. is a public accounting firm with offices in Evansville, Indiana, and Louisville, Kentucky. We are one of the largest accounting firms in Southern Indiana and Kentucky, providing experienced professionals who look beyond the numbers to the heart of complex issues. Our clients range in size from small proprietorships to billion-dollar corporations, from closely-held and family-owned businesses to publicly traded firms, and span nearly every industry. They all have one thing in common: they count on our expertise to capitalize on their opportunities and make the best of their challenges.
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