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INDUSTRY BRIEF FOR MANUFACTURING INDUSTRY Manufacturing Business is Getting Tougher 2 While manufacturing as a whole has seen some great years, manufacturers continue to face unprecedented challenges. Global Market Uncertainties The manufacturing industry's status is closely tied with that of the economy. According to the Bureau of Economic Analysis (BEA), the second quarter 2019 US GDP growth declined to 2.1% from 3.1% in Q1 of 2019 1 , and third quarter growth remained at 2.1%. In December 2019, The Fannie Mae Strategic Research Group projected US economic growth of 2.3% for 2019, 21.1% for 2020, and 2.0 for 2021. 2 Between Trade Wars with China, to Brexit, and the COVID-19 pandemic, the manufacturing industry has undergone many turbulent times over the last few years. Each of these events impacted the industry in one way or another, however, the pandemic has buffeted manufacturers in every sector, on a global scale. While sectors such as technology, med-tech, and building materials have seen sharp increases in demand, others such as automotive, aviation, and energy have languished. The post-COVID era continues to pose obstacles in recovery efforts, however, a major takeaway that we have all learned through the midst of a global pandemic - you must adapt to survive. The economic landscape for manufacturers and their customers has vastly changed and the need for digitization has rapidly accelerated and doesn't seem to show any signs of slowing down. The Need to Shift to B2B2C The products that manufacturers produce are typically sold through a number of distributors (to business customers), and retailers (to consumers). Manufacturers must shift from traditional business-business (B2B) mindset to the more accurate business-to-business-consumer (B2B2C) mindset and bring the end customer into their processes. Furthermore, new online markets have opened, and have created significant competition to traditional resellers and distributors. Brands are no longer protecting manufacturers as consumers look at the social score card (environmental and human rights track records) to decide what they purchase. The same is true with respect to the retailer through which a manufacturer's products are sold. Manufacturers can no longer assume that marketing and selling is the responsibility of dealers and distributors but must understand consumer and business trends and work to streamline the buying experience for the end customer.

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