Industry Trends & Challenges

Machinery companies face a number of opportunities and threats to their businesses. The companies best placed to deal with a challenge will consider it as an opportunity, whilst those poorly prepared will face the challenge as a threat.

Before the COVID-19 crisis, there were several trends that machinery companies were responding to. As the industry recovers from the pandemic some of those trends remain, and some new challenges have emerged. Those include:

• additive manufacturing
• artificial intelligence
• electronics and software introduction
• Internet of Things
• product-as-a-service
• sustainability.

New technologies and procedures that are quickly developed and commercialized can increase productivity and cut expenses, which is vital in this post-COVID world. Furthermore, the transition toward operational and digital efficiencies will almost certainly be accelerated by emerging technologies, changing company models, and rising M&A activity. Particularly, digital thread and smart factories provide a variety of productivity- and efficiency-improving technologies that can shorten cycle times and speed up time to market.

Ongoing challenges restrain overall confidence regarding revenue growth. Operational effectiveness and profitability are declining as a result of labor shortages and unstable supply chains. The cost of commodities including steel, aluminum, and other materials has increased due to shortages. COVID-19 variants, cybersecurity threats, environmental issues, and rising corporate tax rates are further concerns.

Here are some of the key challenges facing the industry:

• cyber security
• geopolitical tension
• labor shortages
• regulatory compliance
• supply chain disruptions
• unfavorable economic conditions.

What is the current position of the machinery industry?

The machinery industry faces significant challenges amidst the struggling global economy in 2024. Inflationary pressures on critical commodities like steel and aluminum are placing strains on profit margins, while high interest rates are limiting customers’ capacity to finance large machinery purchases. Although supply chain disruptions are gradually easing, they still weigh heavily on the industry’s operations. Moreover, the persistent shortage of skilled labor remains an ongoing concern, adding to the complexities faced by the sector.

Sustainability and decarbonization will likely be a key concern in 2024. Many machinery companies are anticipated to boost their investment in R&D capabilities and exploit developments in decarbonization and recycling technology.

Increasing vertical integration will provide manufacturers with greater visibility into their operations and gives them a better understanding of the processes involved throughout their supply chain. This heightened visibility allows manufacturers to improve their forecasting and planning when taking orders or designing and marketing new products.

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