The manufacturing sector is part of the goods-producing industries super-sector group. The manufacturing sector comprises establishments engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products.
For nearly 15 years the staff at Ascend has developed strategies for turnaround, financing, and the sale or acquisition of Manufacturing businesses with results second to none. Unique solutions to common problems separate this group from the rest of the consulting work.
Some interesting facts about the industry (From the National Association of Manufacturers):
In the most recent data, manufacturers contributed $2.18 trillion to the U.S. economy in 2016. This figure has risen since the second quarter of 2009, when manufacturers contributed $1.70 trillion. Over that same time frame, value-added output from durable goods manufacturing grew from $0.87 trillion to $1.20 trillion, with non-durable goods output up from $0.85 trillion to $1.00 trillion. In 2016, manufacturing accounted for 11.7 percent of GDP in the economy. (Source: Bureau of Economic Analysis)
The vast majority of manufacturing firms in the United States are quite small. In 2014, there were 251,901 firms in the manufacturing sector, with all but 3,749 firms considered to be small (i.e., having fewer than 500 employees). In fact, three-quarters of these firms have fewer than 20 employees. (Source: U.S. Census Bureau, Statistics of U.S. Businesses)
Almost two-thirds of manufacturers are organized as pass-through entities. Looking just at manufacturing corporations and partnerships in the most recent data, 65.6 percent are either S corporations or partnerships. The remainder are C corporations. Note that this does not include sole proprietorship's. If they were included, the percentage of pass-through entities rises to 83.4 percent. (Source: Internal Revenue Service, Statistics of Income)
Manufacturers have experienced tremendous growth over the past couple decades, making them more “lean” and helping them become more competitive globally. Output per hour for all workers in the manufacturing sector has increased by more than 2.5 times since 1987. In contrast, productivity is roughly 1.7 times greater for all nonfarm businesses. Note that durable goods manufacturers have seen even greater growth, almost tripling its labor productivity over that time frame.
To help illustrate the impact to the bottom line of this growth, unit labor costs in the manufacturing sector have fallen 8.4 percent since the end of the Great Recession, with even larger declines for durable goods firms. (Source: Bureau of Labor Statistics)
Over the next decade, nearly 3½ million manufacturing jobs will likely be needed, and 2 million are expected to go unfilled due to the skills gap. Moreover, according to a recent report, 80 percent of manufacturers report a moderate or serious shortage of qualified applicants for skilled and highly-skilled production positions. (Source: Deloitte and the Manufacturing Institute)
The cost of federal regulations fall disproportionately on manufacturers, particularly those that are smaller. Manufacturers pay $19,564 per employee on average to comply with federal regulations, or nearly double the $9,991 per employee costs borne by all firms as a whole. In addition, small manufacturers with less than 50 employees spend 2.5 times the amount of large manufacturers. Environmental regulations account for 90 percent of the difference in compliance costs between manufacturers and the average firm. (Source: Crain and Crain (2014))
