If you’re a US based manufacturer like CPI, then perhaps you know that despite continued supply chain issues, labor shortages, an unexpected war, and an uncertain economic environment, the manufacturing industry largely surpassed the expectations of previous years in 2022.
You might argue that with the previous years being characterized by a global pandemic and a global supply chain still reeling, depressing recovery expectations would be easy to exceed. Still, this was never a given and despite the pandemic getting somewhat behind us, new global instabilities and uncertainties were waiting in line to fill in.
The following list is probably pretty similar in year-end C-suite reviews across the USA and even the world, for companies servicing the military-industrial complex.
- The Fed continues to increase the interest rate. Historically, interest rates hikes have a multiyear lead time to industrial production; rate hikes are likely not a cause for immediate concern unless they rise more dramatically.
- Defense activity continues at a good level, although flat for the running 12 months
- Housing market is slowing down, again, thanks to the fed raising interest rates. Interestingly, non-residential construction is set to grow at an accelerating pace in 2023. This increase will drive yellow equipment demand, which is holding steady, however growth may slow in coming quarters if interest rates do not stabilize.
- Energy Recovery and big oil Sectors still not back to pre-pandemic investment levels. This has affected demand in our Linear Position Sensor products used in large Hydraulics for Rig Raisers, motion compensation systems and the like.
- Green energy investments continue to drive forward thinking companies to find ways to replace fossil fuel energy sources. New York City has declared it will reach complete carbon neutrality by 2050. To do that it will need ~250,000 charging stations for electric vehicles amongst other infrastructure upgrades. We’ll see…
- A Lack of common data platforms plagues any meaningful transformation of supply chain management. Despite this, all agree that harnessing the power of digital tools is the key to surviving future COVID-like interruptions to global manufacturing.
- Loss of faith in China based manufacturing. With government dictating strict pandemic rules that all but shut down supply chains across the world, many companies are looking for long term manufacturing partners with more reliable governance. While CPI felt some of this pain, happily 95% of CPI products are made and sourced in the USA.
- Labor shortages as more and more young people prefer a virtual work experience.
To maintain revenue growth, and protect businesses from future instability, leaders will continue to leverage digital technologies, adopt strategies for the future of work, which will drive supply chain resiliency.
CPI Moving into 2023
At CPI, our 2023 plan explores both manufacturing industry trends and specific market opportunities that will allow us to grow in 2023 and beyond.
- Continued focus on new applications for our thermal and waterproof lines. These are still some of the only switches that can survive certain harsh duty applications and clients continue to discover novel ways to design these into new and existing equipment.
- Development of our Draw wire sensor line to leverage our hydraulic cylinder based systems into a more generally usable, stand-alone, harsh environment draw wire sensors.
- Expansion of CPI Product visibility globally. With our parent company Discover IE being based in the UK, and CPI switches receiving the certification “Conformité Européenne.” (Commonly known as the CE marking), the promise of greater presence in Europe exists as CPI products are introduced to more European Manufacturers.
- Increased focus on Green Energy and Sustainability both within our factory and for our products in the broader industry. This is an important target sector for DiscoverIE, as applications are growing in scope and volume.
- Continued redevelopment of existing product lines for cost-reduction, manufacturing efficiency, performance, and broad application.
We’re excited about 2023. The path forward presents new challenges, and we think we have the plan, the team, and corporate support to address them. We’re looking forward to creating innovative solutions to serve the unique needs of manufacturers around the world. https://www.cpi-nj.com/
Good luck to us all in 2023 and Happy Holidays!
General Manager, Control Products Inc.
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