INDIANAPOLIS — Inflation and the corresponding high interest rates are causing the state’s manufacturing industry to shift operations and future plans, according to the findings of the “2023 Indiana Manufacturing Survey: Sailing in Troubled Waters.” Conducted by Katz, Sapper & Miller in partnership with Indiana University’s Kelley School of Business Indianapolis and the Indiana Manufacturers Association, the survey shows one in four of the 80 Indiana-based manufacturing companies that participated expressed their current financial performance is challenged.
Companies are finding it difficult to maintain margins, hire labor on a steady basis, and deal with supply chain shortages because of significant inflation. A majority of respondents (55%) believe the economy will slip into a recession in 2024, which is making them overly cautious. For the first time in this annual survey’s history, the uncertainty is causing companies to forecast a decrease in current year (2023) revenues (-2%), profit margins (-3%), and capital expenditures (-5%) relative to the prior year (2022).
“It’s concerning to see such a minority (30%) of survey respondents consider their businesses healthy; however, the stage is set for a challenging yet hopeful period for Indiana manufacturers,” said Jason Patch, chair of Katz, Sapper & Miller’s Manufacturing & Distribution Services Group. “Owners and operators appear prepared to face these challenges in the months ahead, but they will need legislative support to make sure they can provide for employees, including skills gap training.”
Forty-one percent (41%) of respondents indicated that the number of manufacturing jobs at their organization is increasing, and 45% say they expect the number of skilled jobs to increase due to the effects of advanced tech and automation. According to the results, companies plan to be conservative about future growth plans, like investing in new equipment or facilities.
“While we may be sailing in the troubled waters of economic uncertainty, we expect Indiana manufacturing to continue to prosper, even if those waters remain rough for a while,” said Mark Frohlich, associate professor at the Indiana University Kelley School of Business Indianapolis and director of the IU Kelley School Center for Excellence in Manufacturing. “They remain committed to investing in technologies, developing the workforce, and finding ways to maintain profitability.”
Download the full “2023 Indiana Manufacturing Survey: Sailing in Troubled Waters” report here.
About Katz, Sapper & Miller
Katz, Sapper & Miller is a nationally recognized advisory, tax, and audit firm. Through our deep experience across multiple disciplines and industries, we help our clients make sense of where they’ve been, what’s on the horizon, what’s changing, and what they need to do to prosper in the years ahead. We leverage emerging technologies, combined with our people’s differing perspectives, ingenuity, and creativity, to help our clients solve their most difficult challenges. KSM’s mission is also our passion and our commitment: We inspire great people to
do great things. Learn more at ksmcpa.com.
About the Kelley School of Business Indianapolis
The Indiana University Kelley School of Business has been a leader in American business education since 1920. With an enrollment exceeding 14,000 students across two campuses and online, the Kelley School is among the premier business schools in the country. Kelley features an innovative curriculum built on personal development, teamwork and experiential learning with an emphasis on global and social responsibility, which is reflected in the accomplishments of more than 130,000 living alumni. The Kelley School of Business Indianapolis is home to a full-time undergraduate program; a graduate certificate for professionals in healthcare; master’s and graduate certificate programs in accounting, internal audit and taxation; the Physician MBA and the Evening MBA, which is ranked #15 in the country. Learn more at kelley.iupui.edu.
About the Indiana Manufacturers Association
Formed in 1901, the Indiana Manufacturers Association is the second-oldest manufacturers association in the country and the only trade association in Indiana that exclusively focuses on manufacturing. Manufacturing is the driving force of Indiana’s economy, employing more people and contributing more to Indiana’s gross domestic product than any other industry. The Indiana Manufacturers Association, representing more than 1,100 companies, is dedicated to advocating for a business climate that creates, protects, and promotes quality manufacturing jobs in Indiana. The staff of the Indiana Manufacturers Association are recognized experts in areas including tax, environment, labor relations, human resources, energy, workforce development and healthcare. Learn more at indianamfg.com.