Editor’s Note: Just a reminder that this year’s Manufacturing Leadership Summit will be in Cleveland, Ohio, May 7-8, with a keynote from the CEO of steelmaking titan Cleveland Cliffs, industrial AI advice from Hitachi’s global AI leader, factory tours you won’t want to miss (steel mill!) and much more. Connect with your peers, build lasting relationships and snag the new ideas, technology and tactics that will help you and your company thrive. Join us!
Two months into 2025 and there has already been some turbulence for the business community, especially manufacturers, who often rely on imports and exports. Are the long-anticipated tariffs here?
The Trump administration recently acted upon its campaign promises and ushered in a series of tariffs on goods from Mexico, Canada and China. While there’s been a quick pending reversal of these orders on two of the target nations, many business leaders continue to worry over their company’s performance in the face of such economic circumstances.
In a rare occurrence, Chief Executive’s latest CEO Confidence Index poll fell in January (it’s only happened five times in the poll’s 22-year history) with the majority of CEOs citing tariffs and unexpected policy initiatives as the reasons for their apprehension.
The same holds true for CEOs in manufacturing. Their 12-month forecast for business conditions dropped by more than 1 percent in Q1 (for the second time in 10 years) and is down more than 2 percent from its high in November, when the election led to a 10 percent jump in their forecast. However, their 6.8 out of 10 forecast for future business conditions (on a 10-point scale where 1=poor and 10=excellent) is still one of the highest in the past year, albeit dampened slightly by tariffs and a bit of political uncertainty.
“I am anticipating conflicting forces. Continued reshoring initiatives will drive domestic investment and a new administration who is promising deregulation are both causes to be optimistic. Conversely, tariffs will be inflationary causing bond markets to remain elevated increasing the cost of money, making investments more difficult to justify,” says Dan Culbertson, president of Omni Technologies, a polyurethane components manufacturer. He highlights the cautious optimism of many manufacturers.
To prove that hopes are higher than they may seem, the Q1 poll revealed that more than 90 percent of manufacturing CEOs forecast revenue growth over the next 12 months—an all-time record. This is compared to 75 percent of executives in other industries who forecast revenue growth for the year. Manufacturing profit forecasts remain notably high, with 79 percent reporting anticipated growth, the highest proportion in over a year, compared to other organizations. Additionally, a majority (53 percent) of manufacturing CEOs are projecting increases in hiring and capital expenditures in 2025.
The reasons for the slight drop in confidence are clear, but the strong revenue and profit forecasts are fueled by customer demand, incoming deregulations and a pro-business administration, as stated by several of the manufacturing CEOs who participated in our Q1 CEO Confidence Index survey.
“There is continuing strong customer demand in the face of macro headwinds,” says Jeff Silverstein, CEO of California Faucets—a sentiment echoed by many others.
While a high proportion of companies are projecting revenue growth this year, growth in previous years has been more complex and scattered than Q1 polls indicate. Since 2022, when Chief Executive’s annual Financial Performance Benchmarks survey began tracking annual growth, manufacturers have not always been at the front of the pack when it comes to revenue growth. This year, however, marks a turn into growth, especially for consumer manufacturers, who may have faced strong headwinds in previous years.
After a strong year in 2021, when 83 percent of consumer manufacturers reported revenue growth, likely due to robust consumer demand, it was quickly tampered by rising costs on everything from materials to labor, supply chain challenges and a particularly difficult labor market—especially for manufacturers.
These are the same reasons why industrial manufacturers reported a similar pattern from 2021 to 2023: The proportion of companies reporting revenue growth was on a decline, which was not mirrored by other industries that were less affected by remote work mandates, supply chain issues and the labor market. Then in 2024, a rising proportion of both industrial and consumer manufacturers began to report revenue growth and are now projecting growth at better rates than companies in other industries.
The average projected revenue growth rate for manufacturing companies for 2025 is significantly higher than that of other companies overall, with industrial manufacturing reporting 8.2 percent growth, consumer manufacturing reporting 8.5 percent growth and the overall figure at 7.6 percent for the year.
As for EBTIDA, data shows that Covid and its associated challenges really affected the bottom line for manufacturing companies, but recovery was strong in 2023. Since then, manufacturing profits have outperformed the median overall margin by about 1.5 points yearly.
2024 marks the positive trend of margins increasing on a yearly basis, with both consumer and industrial manufacturers reporting a 2 percent climb from 2023 to 2024, both beating the overall median margin of 13 percent. Projections for 2025 are also positive for manufacturers, with both industrial and consumer manufacturers projecting a higher median than companies in other industries, at 11 percent, 12 percent and just 10 percent, respectively.
The CEO Confidence Index is America’s largest monthly survey of chief executives. Each month, Chief Executive surveys CEOs across America, at organizations of all types and sizes, to compile our CEO Confidence Index data. The Index tracks confidence in current and future business environments, based on CEOs’ observations of various economic and business components. For additional information about the Index and prior months data, visit ChiefExecutive.net/category/CEO-Confidence-Index/
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
0
1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.