In spite of numerous challenges in recent years, the manufacturing industry still accounts for roughly 12% of the overall U.S. economy in terms of GDP. The majority of manufacturing executives responding to the survey were from companies with annual revenue less than $50 million, so their optimism may be due, in part, to their smaller size. Larger corporations could be more vulnerable to a global downturn.
And while there is a sense that manufacturing still has room for expansion, it’s tempered by concern that anyone major event from Washington could change this outlook overnight. Already, in the first quarter of 2019, CEO’s and CFO’s are openly discussing reduced hiring and capital expenditures for expansion in the wake of uncertainties.
Tax reform implications will bring new changes as well, so there will be a stronger need for dramatically different tax planning and compliance. Through all the potential changes, working with a team of industry-experienced advisors to provide insight and answers continues to be important.
Although the challenge of gaining a competitive advantage remains critically important, I believe the resilience and success our manufacturing clients have created for themselves will help alleviate the major concerns for 2019.
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ABOUT THE AUTHOR
John Mark McDougal, CPA, is Shareholder-in-charge for the accounting and assurance services and lead shareholder in the manufacturing/distribution industry at LBMC. He can be reached at firstname.lastname@example.org or 615-309-2474.
LBMC is a Top 50 firm in the country and the largest professional service solutions provider based in Tennessee, serving more than 10,000 clients with diverse needs across a spectrum of industries. Today, we’ve become industry leaders in financial, human resources, technology, information security, and wealth advisory services. For more information, visit www.lbmc.com.