Survey Finds Labor Productivity Top Factor for Global Competitiveness in Manufacturing

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Manufacturing managers, directors, and executives in Australia, Brazil, Canada, China, France, Germany, India, Mexico, Spain, the U.K., and U.S. were surveyed for current trends in global manufacturing. Respondents from developed economies fared similar to emerging nations when rating manufacturing's importance, with 70% of all respondents citing manufacturing as the single most important industry for their country's economic health.

Some 74.7% of all respondents agreed that a high level of labor productivity is very or extremely important for achieving manufacturing success. While emerging nations rated the need for modern infrastructure higher than mature economies, labor productivity still topped as the main driver of success among all countries. Brazil, Mexico, and Spain scored the highest regarding labor productivity, with 82% in all three countries noting it to be very or extremely important. China, France, India, and Germany scored relatively low, with 66%, 66%, 68%, and 68%, respectively.

Brazil respondents ranked the need for modern infrastructure the highest, with 88% rating it as very or extremely important. China, India, Mexico, and Spain followed with 82% in all four countries, and 66% in the U.S. agreed about modern infrastructure's importance.

Brazil, India, Mexico, and Spain respondents rated access to foreign investment the highest, with 50%, 50%, 70%, and 60%, respectively, citing it as very or extremely important. Canada, Germany, and the U.S. ranked the lowest, with only 12%, 16%, and 18%, respectively.

China ranked government support for the manufacturing industry the highest, with 82% rating it as very or extremely important, and 48% of U.S. respondents agreed to the same.

When asked about factors that can improve workforce productivity, training and continuous improvement of the existing workforce was the top choice, with 68.2% of all respondents noting it as effective. Investment in technology followed next, with 63.3%.

In regard to issues impacting productivity, the survey found that absences can get in the way. When asked if absenteeism was not a problem, Australia, Canada, U.K., and U.S. respondents agreed the most, with 42%, 48%, 46, and 44%, respectively, demonstrating absenteeism to be a smaller issue. Brazil, France, and Mexico cited absenteeism as a bigger problem in manufacturing, with 24%, 26%, and 22%, respectively, agreeing.

The survey also showed that both developed and emerging economies are impacted by a shortage of skilled production employees, with 68% in Brazil, 36% in China, 22% in Germany, 44% in Mexico, and 26% in the U.S. agreeing to a shortage.

As far as how the future of manufacturing looks as a career option for the next generation, 88.2% of all respondents were very or somewhat positive about encouraging younger relatives to consider manufacturing as a practical career option. In the U.S., 90% agreed and other nations fared similar. Australia and China ranked the lowest, with 74% 70%, respectively.

The respondents were also asked about one strategy that they would recommend for global competitiveness. The winning recommendation, at a combined 45.5%, was that manufacturing companies should keep existing facilities as is and invest in workforce operational excellence methodologies, comprised of strategies for more effective labor cost control, minimized labor law compliance risk, and improved workforce productivity.

For more information about this survey, contact Indrani Ray-Ghosal with Kronos.