Conditions for U.S. manufacturers have been anything but positive since December 2007. These businesses have lost at least 1.96 million jobs and don’t plan to increase employment for at least another year. But senior managers, responding to a ThomasNet survey, believe conditions are looking up and they are carrying important lessons forward from this recession.

For one thing, these executives aren’t expecting handouts from the federal government’s American Recovery and Reinvestment Act program. Instead, they are looking to innovation as key to a better future.  Several survey respondents indicated that “developing new or innovative” products will be more important than continuing to offshore work which has been a common strategy to improve business conditions. For the second part of 2009, nearly 15% of manufacturers will expand into new product and business lines. To support this expansion, 6.2% indicate they will increase online marketing while 6.1% say they’ll widen sales channels.  According to one respondent, “[m]arketing is the key and innovation is mandatory for small corporations.” This new positivism extends to business predictions for the rest of 2009 and into next year.

About 1 in 3 of these companies expects sales to grow during that period while about 4 in 10 predict a steady state in revenues.

[Source:  Optimism Amid Crises, Industry Market Trends, ThomasNet, 9.38.09]

Amidst the news that the nation’s unemployment rate continues to rise and may reach 10% before the economic recovery really kicks in, some analysts are watching the staffing industry closely. While Staffing Industry Analysts (SIA) predicts that 2009 will usher in an overall drop of 25% for companies in this industry, the firm is predicting an industry growth rate of 5% for 2010.

One sector of staffing, temporary help, is often a leading indicator. So it’s cause for excitement that SIA notes the temporary staffing industry overall experienced back to back gains in July and August, 2008. The following two trends are notable and predictive:

• The industries with the most demand for temporary staff include: Industrial, IT, telcom, manufacturing, and finance/insurance
• The industries where demand continues to fall include: Travel nursing and legal

A related release by Career Builder indicates that 9% of large firms plan to hire temporary employees for the 4^th quarter, marking a 2% improvement over the 3^rd quarter. The trend watchers at Career Builders concur with SIA analysts when they note staffing increases should be higher for “health care and industrial positions.”

Though this is a small improvement in the employment industry, it’s a positive trend and may prompt staffing firms to increase their marketing efforts going into 2010.

[SIA release, 9.28.09; Career Builder release, August 2009]

With all of the attention paid to oil and coal reserves, and renewable energy sources, the availability of fresh, clean water has become a background issue. But think tank CERES sounded an alarm recently that  shortages of water will increase costs significantly for industries such as biotech, pharmaceutical and metals and mining, which rely on this natural resource. A CERES reports also cautions that water shortages could lead to global political and economic instability.

To capitalize on this problem, investors and entrepreneurs are developing improved desalination technology. By treating seawater with processes such as reverse osmosis, the looming water shortage could be postponed indefinitely.  Several firms operating in this market manufacture components to bring new facilities online, globally. Company names in the industry currently include Energy Recovery and Flowserve. Look for more companies to research and introduce products designed to ease water shortages and as they do, they’ll need strong marketing campaigns to educate and persuade potential purchasers.

[Sources: Water Scarcity & Climate Change, Ceres, Spring 2009; Hoyt, Jennifer. "Firm Bets Big on Desalination," Wall Street Journal. 5.6.09.]

Long before boxes of cereal or cookies land on the shelves at the local grocery store, manufacturers have spent significant sums on trade promotion management. The goal of these expenditures, which approach 14% of revenues according to some surveys,  is to influence retailer behavior. Specifically, trade promotions encourage retailers to take steps to increase sales of manufacturers’ products.

Trade promotions attempt to influence retailers to:

• Carry specific products
• Devote a set amount of shelf space/location to the products
• Set a specific price for the products

While manufacturers and retailers may be cutting some advertising budgets, manufacturers have a different plan when it comes to trade promotion spending in 2009 as revealed by a recent Consumer Goods poll:

• Decrease slightly over last year 33%
• Stay flat from last year 25%
• Increase more rapidly than previous years 20%
• Increase at the same pace as previous years 18%
• Decrease significantly from previous years 5%

The survey results indicate that firms are still willing to spend on trade promotion and they are also looking for systems to help them identify opportunities for improved efficiency and to measure return on investment. Share the results of this survey with your management consulting clients and develop a pitch to consumer goods manufacturers that allows them to increase sales along with trade promotion spending.

[Sources: Trade Promotion Management, Accenture, 2008; Trade Promotion Management, Consumer Goods Today, 5.1.2009]