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Five equipment manufacturing trends to watch in 2022

Published on 01 March 2022

Both the immediate and long-term future of the equipment manufacturing industry will be defined by the development of a number of prominent trends, each of which is poised to have a significant impact in 2022 (and, in many cases, beyond).

It's critically important for equipment manufacturers to not only develop a keen understanding of these trends but also how they will evolve over time. Perhaps most importantly, however, those within the industry must be able to assess their impact on equipment manufacturing and its customers.

So, with that fact in mind, let's look at five key trends poised to impact equipment manufacturers this year:

1. Workforce challenges and solutions

When it comes to the workforce, 2021 has proven that doing what we’ve always done will no longer get us what we used to get. Demographic research shows that employment challenges are not going to return to what they were pre-pandemic. If anything, the pandemic acted as an accelerator that took labor-force trends already sneaking up on the industry and exploded them into a new reality.

The most significant trends include the shift from a baby boomer pre-pandemic drift toward retirement to a pandemic mass exodus of retirements. Second, a labor-force participation rate that was declining since 1980 dropped to record lows with 2.4 million women leaving the workforce, fewer millennials seeking careers of their own, working-age males increasingly preferring part-time over full-time work and an opioid epidemic siphoning off prime-age men by the hundreds of thousands per year. Finally, we have to recognize that the U.S. birthrate has been steadily declining, hitting a 35-year low in 2019, according to census data. With fewer and fewer people available, the labor market will continue to tighten. If you are looking to immigration as a solution, be cautious, as the same decline in birthrate is happening in countries we typically look to for sources of immigrant labor.

So, what can companies that have been willing to be curious teach us?

First, if your HR department says they are “doing everything they can,” consider it a red flag. The war for talent is being won by HR departments whose mantra has become, “What else can we do?” Being curious includes evaluating and offering competitive compensation, meaningful benefits, potential career development opportunities and, most of all, flexible work. The employee experience needs to be reconsidered, much like we’ve analyzed the customer experience in the past. Important considerations include:

  • Streamlining the application process
  • Meaningful onboarding
  • Mental health supports
  • Opportunities for upskilling
  • Internal career path or debt-free education

In addition, hourly workers want flexibility, even if they have to show up in person. Creative companies are finding ways to provide flexibility and predictability in scheduling to support health and wellness, childcare and caregiving responsibilities.

— Julie Davis, AEM senior director of workforce and industry initiatives

2. Bipartisanship

At the close of 2021, federal lawmakers delivered a long-awaited holiday gift to the American people – passage of the Infrastructure Investment and Jobs Act (commonly known as the bipartisan infrastructure bill). While many were elated at the congressional approval and enactment of the bill (AEM included), we were – and still are – frustrated and disillusioned with the time it took to get the job done. In a recent op-ed in RealClearPolitics, I shared how the unnecessarily drawn-out and overly political infrastructure debate spells trouble for our country. So, what can be done in order to end the petty partisan squabbling during a critically important election year? One word: bipartisanship.

While the infrastructure bill has been signed into law, much work remains to be done. Now it is up to U.S. Secretary of Transportation Pete Buttigieg and President Biden’s recently appointed infrastructure czar, the former mayor of New Orleans Mitch Landrieu, to work with state and local governments to smooth the rollout and ensure the successful implementation of the $1.2 trillion bill. And the work doesn’t stop at infrastructure. We need our elected officials at the state and federal level to put policy ahead of politics and advance pro-growth economic policies that will ensure the long-term growth and prosperity of the equipment manufacturing industry. Lawmakers must also make investments to help attract, train and retain the next generation of skilled workers to address our industry’s growing workforce needs. Finally, we need commonsense policies that will help revitalize American manufacturing, bolster rural communities across our country and reenergize the U.S. economy.

—Kip Eideberg, AEM senior vice president of government and industry relations

3. Supply chain management

In 2021, off-road, heavy-duty equipment industry stakeholders found themselves dealing with a relatively new concept for U.S. manufacturers: chemical management issues. On Jan. 6 of last year, the EPA announced its Final Rule regarding the prohibition on introducing phenol, isopropylated, phosphate (3:1) into commerce. This ban on a commonly used flame retardant struck the equipment manufacturing industry especially hard. Overnight, a wide swath of economic actors needed to rewire their manufacturing and design processes, and perhaps most importantly, learn how to manage a wide-ranging, deep and complex global supply chain not familiar with the needs of tracking chemical components.

Managing supply chains, communicating chemical requirements, educating suppliers and managing data will be the only way to meet the coming challenges. With the size and complexity of the global off-road, heavy-duty equipment manufacturing industry, meeting this challenge will be an enormous task. To achieve this goal, industry stakeholders will need to work together to establish new industry best practices and efficient lines of communication to ensure information can effectively travel from one end of the supply chain to the original equipment manufacturers. The industry has not yet found all the answers, but this will be a very important issue for 2022 and beyond.

—Jason Malcore, AEM director of global standards and compliance

4. COVID-19 and employee safety

As we enter 2022, COVID-19 continues to have a significant impact on the manufacturing industry. While we have developed health and safety protocols and best practices to combat the virus, COVID-19 has done what viruses do best – change and evolve.

Thankfully, the manufacturing industry continues to change and evolve right along with it, adapting to new CDC guidelines, OSHA regulations  and local mask and vaccine mandates to keep business owners and their employees safe.

If the last two years have taught us anything, it’s that our industry remains strong and resilient, even in times of tremendous uncertainty. The pandemic has affected the way we do business, our economic outlook, our supply chain and, maybe most importantly, our workforce.

All this change will come to an end, eventually. Until that happens, we will need to keep adapting to keep our industry safe.

—Sara Feuling, AEM senior director of construction

5. Leveraging data for better decisions and traceability in agriculture

Now more than ever, farmers are operating on the notion of doing more with less. Whether this is because they must deal with resource constraints or are now expected to because of societal pressures, we are seeing this happen. As AEM showed early in 2021 with the release of the Environmental Benefits of Precision Ag study, technology has brought us a long way and still leaves a lot of room to grow. However, data is the key to accomplishing this goal even further.

Data enables farmers to make better decisions for the year based on the 4R principle of right rate, right place, right time and right source. Thus, we can use historical data to make decisions on what to apply where and when. Farmers have been doing this for years, but with costs of fertilizer and other on-farm inputs on the rise, utilization of this data has never been more important. It can also help provide input into other areas of the farm to increase efficiencies there as well.

—Austin Gellings, AEM agriculture services manager  end mark

—From an Association of Equipment Manufacturers news release.

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