The recent global recession had a significant impact on economies and industry sectors worldwide, and most are still struggling to recover. Although negatively impacted, the Industrial sector fared better and continues to recover faster than many sectors. Rebounding growth in global demand and continued advances in technology have enabled increased productivity and cost reductions in manufacturing, services and other industrial subsectors. Manufacturing reshoring and near shoring is accelerating as low-cost manufacturing countries are becoming less competitive due to rising labor costs and the costs associated with logistics, increased inventory and service disruptions. Increased M&A activity in many subsectors has created synergy, leverage, productivity, efficiency and cost reduction opportunities. The Industrial sector’s strength has been a major contributor to the continuing recovery of the U.S. economy.
Cost and margin pressures remain a continuing challenge, however, as customers demand lower prices, higher levels of service and better quality. Governmental regulatory requirements regarding environmental, safety and compliance continue to drive cost increases as well. In addition to cost pressures, a growing challenge facing the Industrial sector is finding and keeping the leaders, management and skilled workers required for continued growth and profitability. This is being driven in large part because of an aging workforce, and younger workers and professionals targeting more modern technology focused jobs and careers. As a result, talent scarcity could worsen, creating wage increases.