** UPDATE 3/13/2020 **
As the disruption of COVID-19 (Coronavirus) becomes more crystalized, it’s clear that economic impact could fully trigger drawdown into Q2 and Q3 of 2020. Early reports are indicating that despite the stock market moving into bear territory, the majority of industry not related to energy, tourism or airlines, will not be affected beyond the psychological impact. As manufacturers, so much of concern is delayed or muted because of downstream effects but the anxiety over the “what if” is still very real.
Add to that the cancellation of trade shows and other staple events that fill up the pipeline for the year and we’ve got some real problems.
Snap wants to help. A few of our customers are pivoting those sales and marketing dollars into webinars and direct-to-listener programs. Others are investing in more nurturing campaigns and MarComm. Let’s spend a few minutes together to decide what path may make sense for the immediate while also keeping an eye on what the inevitable rebound will be like later this year.
** UPDATE 3/13/2020 **
As we continue through Q1, we’re seeing the results of numerous surveys being released that provide insight into the performance of various sectors in 2019 and their expected output in 2020. The Minnesota Department of Employment and Economic Development (DEE) and the Federal Reserve Bank of Minneapolis recently released the results of the annual Manufacturing Business Conditions Survey. According to the survey results, manufacturers expect unchanged or improved conditions in 2020, which is exactly what they saw this past year. Let’s dive into the most pertinent findings.
In terms of methodology, a random sample of 1,000 businesses provided by the ReferenceUSA database of Minnesota Manufacturers were sent the survey between the end of November 2019 and the beginning of January 2020. The response rate to the survey was 20 percent. With outliers taken into account, the confidence interval is plus or minus 6.5 percentage points.
The State of Manufacturing in Minnesota
Manufacturing is a massive part of Minnesota’s economy, representing 14 percent of the state’s GDP. That makes it the second largest industry in the Land of 10,000 Lakes. It follows that manufacturing accounts for 40 percent of all jobs in the state, employing 330,000 Minnesotans either directly or indirectly.
The survey revealed relatively stable conditions across the industry:
- Forty-eight percent of respondents reported stable productivity.
- Forty-four percent reported unchanged employment.
- Forty-one percent reported an increase in the number of orders.
Impact of U.S. Tariffs on Manufacturers
The recent U.S. tariffs merited a special question on the survey. The majority of survey respondents reported that the tariffs and associated foreign countermeasures had no effect on capital expenditure, employment, or investment, but 42 percent and 44 percent of respondents reported a negative effect on revenue and input cost, respectively. Very few respondents reported positive effects.
Expectations for 2020
Looking forward to the rest of this year, manufacturers predicted positive or unchanged conditions:
- An overwhelming 94 percent of survey respondents expect employment to either remain stable or increase, and the same percentage expect similar conditions for production and service levels.
- Eighty-seven percent of respondents expect to increase or maintain their numbers of orders.
- Eighty-two percent expect to see equipment and plant investments increase or remain stable.
While the outlook on manufacturing in Minnesota seems generally positive, the survey also notes that diffusion indexes for most indicators were lower than in 2019, which may show that manufacturers aren’t feeling as optimistic about the coming year. While we hope to see this essential industry continue to grow in 2020, it’s likely to be slow going as manufacturers work to combat internal and external concerns, such as tariffs and a shortage of skilled labor.
Preparing for the Future of Minnesota Manufacturing
With Minnesota’s manufacturing sector expected to remain generally stable in 2020, standing out in a competitive landscape has never been more vital to continued success. Digital marketing is quickly becoming an essential component in every company’s growth strategy, and manufacturers must be prepared to use every effective tactic at their disposal.
Marketing for Manufacturers
As a cutting-edge digital marketing agency, Snap enjoys working with this backbone industry that drives a significant portion of the world’s economy. We act in concert with manufacturers large and small to drive progress and key learnings in several different ways:
- Defining a strong marketing strategy and clear message that positions and keeps the customer at the center of their business
- Influencing the customer journey (distributors, buyers, and others)
- Creating revenue growth through smart digital marketing tactics
Snap is a full-service agency, offering PPC, SEO, social media marketing, and web design services, among other valuable tactics and tools. We’ll work with you to meet your business objectives, whether they be focused on increasing revenue or strengthening your brand’s reputation.
Create a Powerful Digital Marketing Strategy With Snap
As we progress through 2020 and begin considering 2021, the general sense of stability yet wariness of contraction at work in the manufacturing industry indicates that now is an excellent time to ensure the ship is tight and pre-recession work is understood.
If you’re a manufacturer on the hunt for innovative digital marketing services, Snap would be happy to assist you. Reach out today to learn more about how we can help you develop a sales and marketing strategy that will contribute to the success of your business.