Manufacturers concerned with rising material costs

Madison, Wis. - Most Wisconsin manufacturers polled in a recent survey say that concerns about rising raw materials costs and pricing pressures outweigh anxiety about offshore competition.

The Wisconsin Manufacturing Extension Partnership, a nonprofit consulting organization for small and mid-sized manufacturers, conducted the survey of 173 Wisconsin firms. They ranked themselves on performance and external market issues.

Approximately one-third of respondents reported growing sales and profitable growth, while a smaller percentage indicated weaker performances. Fourteen percent indicated that they are in "survival mode" and 10 percent reported declining sales.

Sixty-seven percent cited rising raw material costs as an external market issue with a major impact on their business. About half cited extreme pricing pressures and increasing demands from customers, but only 27 percent cited offshore competition.

These findings elaborate on a 2005 Wisconsin manufacturing study, which suggested that Wisconsin's $46 billion industrial sector is well-positioned for future growth as long as manufacturers adopt business practices that emphasize speed and agility, and make the transition from “commodity” to “value-added” products.

“Lean is essential, but top-line growth and market diversification are becoming equally important contributors to manufacturing success today,” said Michael Klonsinski, executive director for WMEP.

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