Tri-State Automation, Hammond

Visitors look over robotic machinery at Tri-State Automation in Hammond at a grand opening in 2016. Indiana's manufacturers believe an effective way to make up for workforce shortages is to invest more in automation according to the 2017 Manufacturing Survey: Upgrading for Growth released Wednesday. 

Tony V. Martin, The Times

INDIANAPOLIS — Indiana's manufacturers believe an effective way to make up for workforce shortages is to invest more in automation. 

That's according to the 2017 Manufacturing Survey: Upgrading for Growth released Wednesday and presented during the Indiana Manufacturers Association Hall of Fame luncheon in Indianapolis. 

"The skills gap and workforce issues, this is what people always talk about," said Mark Frohlich, co-author of the survey report and faculty member of Indiana University's Kelley School of Business on the IUPUI campus. "Now more emphasis is being placed on automation."

What's driving this, according to the survey, is manufacturers' inability to shore up their ranks with young people as well as a lack of individuals now seeking work with the necessary technical skills.  

According to the survey, continued investment in automation and better technology is driving the need for workers with even more computer and other technical skills. This means as manufacturing processes become more dependent on technology, there will be growth in advanced manufacturing jobs and a decline in unskilled positions. 

Manufacturers believe this is why more resources need to be placed toward workforce training so those employed in low-skilled manufacturing jobs can be retrained for more advanced manufacturing positions, the survey found.  

Steven Jones, co-author of the survey report and also a faculty member at Indiana University's Kelley School of Business on the IUPUI campus, said survey respondents believe their companies will continue growing as they invest in better technology. 

"Generally, businesses continue to believe they are healthy," Jones said. 

Overall, the survey found the state's manufacturers remain upbeat but believe a slew of issues from the regulatory climate, corporate taxes and rising health care costs continue to hold back the state's growth potential. 

The latest survey, while mostly positive, offered a manufacturing health scorecard number of .468, the lowest number in six years and a drop of .022 from last year's survey.

The health scorecard number peaked at .536 in 2014. The survey's authors said a number greater than .500 reflects a strong manufacturing climate, while anything below that number translates to a weakening environment.    

A total of 144 manufacturers from around the state took part in the 11th annual survey, which was conducted between the spring and mid-summer and commissioned by the Indianapolis-based CPA firm of Katz, Sapper & Miller in partnership with the IMA and Conexus Indiana. 

Survey respondents said they want more intervention from state and federal lawmakers and seek better tax rates, a health care reform plan to reign in rising costs and more help to address the state's workforce shortage and improve training programs to better prepare future workers. The survey also found that respondents believed they were getting more support from state government than from federal officials. 

The survey revealed 88 percent of respondents expected revenues to grow in 2017, which is up from the 2016 survey when 79 percent of respondents expected revenue growth. Respondents said revenue growth would come through new products and growing market share.

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Business Editor of The Times of Northwest Indiana