Industry outlook 2021: Optimism amid disruption

The surprisingly quick economic rebound has caught the world of manufacturing off guard. With many businesses having scaled back production, some key producers going out of business, and transportation severely disrupted, supply chains have been very vulnerable in the recovery phase.

Lead times of supply have lengthened dramatically according to the global PMIs, and inventories have been drawn down to very low levels in order to continue to produce.

On top of the supply chain frictions caused by the pandemic and the surprise rebound, the long drought in Taiwan led to severe disruptions in semiconductor production. All of this has put the brakes on the rapid recovery and has caused declining production in places like Germany and the US.

In the meantime, demand continues to flow, which has resulted in a bright outlook despite severe disruptions. Agility may be a corny buzzword, but it is required in manufacturing over the course of this pandemic.

There are big differences between sectors of course, with electronics outperforming while car production is still down 26% compared to the pre-pandemic period. For more on this, and the ongoing supply chain issues, download our full report.