99 Industry  News

This industry-specific report includes data from Manufacturing and Engineering companies that are not in the aerospace; clean tech; machinery, equipment, system & controls or automotive and transportation sectors. Overall, companies in the Manufacturing and Engineering industry are slightly less optimistic in their assessment of the current business climate than foreign business in other sectors. Fully half of the industry respondents forecasted revenue declines for 2015 as compared to 2014 and plan to decrease headcount in China for 2016. No industry respondents reported that their EBIT (earnings before interest tax) margins for China in 2015 were higher than their company’s global margins.

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Despite these and other challenges, 90 percent of industry respondents have not moved capacity outside of China in the last three years and are not planning to do so in the next three years. Two-thirds report that recent changes in government policies have improved the overall business environment in China. Manufacturing and Engineering respondents view digitalization as an important tool to enhance their competitiveness in China, particularly in operations and supply chain management.

Key Points of this Report:

  • Inconsistent or unclear laws and regulations are the number one challenge, followed by rising labor costs.
  • No industry respondents estimated that their company will increase investment in China operations for 2016 by more than 50 percent.
  • Half of industry respondents report that more than 75 percent of their China revenues comes from products of services that were locally designed, developed or at least tailored to local requirements. 

This report distills industry-specific data from the full 2016 BCS Report, reflecting the business climate for this specific industry.