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From the Editor
By Corinna Petry
Adapt, grow

usiness media outlets often focus on the big players and how they perform during economic cycles. Big Tech, Big Pharma, Big Box retailers, etc. But the bread-and-butter portion of the manufacturing sector is often small to midsize companies with fewer than 50 employees. These include distributors, forging companies, processors, traders, fabricators and niche suppliers.

Umpqua Bank, based in Portland, Oregon, surveyed its mid-market business customers to produce a report about how those companies have fared through a global pandemic and how they are adapting.

“Umpqua’s latest national survey captures how [small and middle-market] companies have transformed … in the face of unprecedented challenges. It finds they are emerging more prepared. They’ve embraced the reality of disruption as the new normal and the need for continuous evolution as vital to success,” the bank’s report, based on its survey, states. Companies are “more efficient and more nimble, which will make them better prepared to adapt to the next disruption.”

Seventy-five percent of survey respondents said they were making significant changes to their products and services; 75 percent said they were making significant changes to their pricing models; 81 percent said they were digitizing new areas of their business to become more efficient; and 79 percent reported they were automating repetitive manual tasks. Nearly 90 percent of businesses surveyed have experienced some type of supply chain difficulty in the last 12 months, with the most common challenge being much higher prices for the goods they purchase.

companies are more efficient and nimble, which makes them better prepared to adapt to the next disruption.
umpqua bank national survey
Forty-seven percent of middle market companies plan to increase their real estate footprint in the next 12 months; 52 percent are eyeing acquisitions; and a majority of respondents expect their revenues to rise over the coming year.

“In the midst of significant pivots over the past year, these companies continue to make operational changes in response to this new normal,” states Richard Cabrera, executive vice president and head of Middle Market Banking for Umpqua Bank.

In fact, the economic upheaval appears to have fortified many commercial entities. Over 40 percent of middle-market respondents say the pandemic has had a positive effect on their companies, with manufacturing among those most likely to report favorable effects.

There is growth, aside from the bounce back from the first phases of COVID-19. “Big Steel”—U.S. Steel and Nucor—announced they each would build 3 million tons of new capacity, but smaller companies are also installing new equipment, entering additional geographic regions, acquiring companies and investing in the future.

Please be sure to check out the Hot Sheet section (page 12) for new capacity announcements and our cover story (page 16) for a comprehensive overview of what six manufacturing sectors are projecting for their own near-term futures.