A majority of Hoosier manufacturing companies surveyed this year said the effects of the pandemic on their business have been serious – but they expect to ride it out.
This year’s Indiana Manufacturing Survey shows how companies are adapting to survive through COVID-19, including more investment in automation.
The pandemic has highlighted top issues from past surveys including workforce shortages and automation.
Forty-four percent of respondents said the Paycheck Protection Program and other CARES Act federal aid helped their companies.
Katz, Sapper & Miller partner and survey co-author Jason Patch said businesses were able to keep people employed and on payroll with the federal loans, making it a win-win for workers and employers.
“Because if some of these companies were forced to let people go because they didn't have the money, sometimes getting those people back as things ramped back up are very difficult,” said Patch.
IUPUI professor and report co-author Mark Frohlich said COVID-19 is accelerating a shift to automation and advanced technologies, referred to as Industry 4.0, to help make workers more productive.
“So it was nothing about well, we'll just, you know, put robots in and get rid of the whole workforce, it was mostly about, you know, robots can help support our workforce,” said Frohlich. “If somebody does go out sick, or can't travel because of the pandemic, then maybe the automation can help out.”
Frohlich suspects there will be more automation in support functions such as marketing, engineering, accounting and finance.
He said for every one company that automates to reduce its workforce, several more are automating to hire more people and meet demand for products.
"And companies have backlogs. There was at least one company who said, we are going to go to all weekend shift now to keep up with the demand," said Frohlich.
He said he sees the manufacturing industry right now in a V-shape recovery out of the pandemic.
The survey also found supply chain issues due to shutdowns and other challenges have caused nearly 1 in 5 respondents to say their company is rethinking its supply chain already or planning to move foreign production to the U.S. in the next few years. Frohlich said it was an increase of about 10 percent from previous years.
The survey has been conducted for 14 years organized by accounting firm Katz, Sapper & Miller with responses analyzed by Indiana University Kelley School of Business researchers. Responses come from a diverse group of manufacturing businesses in the state.