Georgia manufacturers will increasingly move some operations abroad over the next five years in response to stiff offshore competition, according to a survey of 160 Georgia manufacturers released last week by the Atlanta accounting firm of Habif, Arogeti & Wynne LLP.
However, the majority of survey respondents said they expected revenue growth over the next three years, banking on a nationwide economic recovery and more efficient manufacturing and management processes.Increasingly, companies here are shifting to the manufacturing of high-tech products that is not so easily sourced overseas to keep them competitive and profitable, Richard Kopelman, head of Habif’s manufacturing practice group, told GlobalFax.
But he cautioned that more money would not necessarily translate into more jobs, despite the assertion by 69 percent of surveyed companies that they would add jobs over the next five years.
“Job growth will continue to lag behind revenue growth,” Mr. Kopelman said, noting that the manufacturing of high-tech products often requires fewer workers with more skills than lower cost production lines.
According to report data, only six percent of respondents have moved manufacturing activities offshore since 1998, but 14 percent of those surveyed said they are either “very likely” or “somewhat likely” to transfer some activity abroad over the next five years.
The survey also found that 32 respondents had each lost sales in excess of $1 million to offshore competitors since 1998. Five other respondents each listed specific losses of more than $10 million in sales to international competitors during that time period.
However, the report noted that manufacturers that sold products internationally had higher profit rates than those selling products domestically, suggesting that global sales benefit Georgia firms.
Industries represented by survey respondents include chemicals and allied products, fabricated metals, food products, rubber and plastic production, apparel and textiles, industrial machinery manufacturers, lumber and wood products, electronic equipment and paper products manufacturers, among others.
Georgia State University, the Georgia Industry Association and The McCart Group, a risk management and consulting firm, also contributed to the report.
To download a copy of the 16-page report, visit www.hawcpa.com and click on the “survey” link under the “what’s new?” section of the homepage.