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Rising material and commodity costs coupled with higher interest rates and rising inflation, ever-increasing ESG requirements despite geopolitical turmoil and ongoing supply chain issues: Various factors currently ensure that the economic environment is very volatile. This also has an impact on the manufacturing industry. What trends are CEOs most concerned about - and what does the near future hold? Our Global Manufacturing Prospects 2023 report provides answers and insights.

For the report, we surveyed 182 manufacturing CEOs worldwide on how they view the current challenges and what is most important to them in terms of strategic direction. The report includes views from executives in eleven countries across Europe, North America and Asia Pacific. With the analysis, our authors provide benchmarks for the industry.

CEOs are confident, but expect headwinds in the short term

Despite the uncertain situation on the world markets, the CEOs' growth expectations until 2025 are at a similar level as in the previous year's survey: 64 percent of the top decision-makers are confident, 20 percent even very confident. Confidence in their own company is thus unbroken. With regard to the growth prospects for their own industry (52 percent confident/31 percent very confident), the CEOs are even significantly more optimistic than before.

However, the CEOs expect headwinds for the global economy in 2023. This is due in particular to government measures to combat inflation and a decline in demand. Notwithstanding the longer-term optimism, more than three-quarters of respondents acknowledge that a downturn could affect their companies' three-year growth prospects. Nearly four out of five CEOs expect profits to fall by 6 per cent or more.

Smart digitalisation and ESG in particular focus

To support their own sales growth and drive business portfolio optimisation, half of the manufacturing decision-makers surveyed signalled a "high propensity for mergers and acquisitions". Despite a decline in 2022, corporate transactions remain an important way for manufacturers to strengthen their core business, find faster ways to expand and implement restructuring.

The report also reveals that macroeconomic developments are prompting executives to focus even more on dual transformation than before: Smart digitalisation and a focus on ESG are particularly important. CEOs note that there is a decoupling of two key drivers: while the global economy is slowing down, technological change continues to accelerate.

Manufacturing industry faces tightrope walk in uncertain times

The manufacturing industry is facing a balancing act in the face of the current situation. Short-term and strategic decisions are equally important to ensure sustainable growth. The decisions concern investments in technology and human resources as well as onshoring and offshoring. Our survey shows that CEOs are aware of the opportunities and risks when it comes to charting a solid course for the future.