This Week's Herman Trend Alert Purpose Emerging as Important Driver of Engagement

The Herman Trend Alert November 29, 2006 Manufacturers Being Squeezed In the United States and elsewhere, structural (non-wage) costs for manufacturers, as a percentage of the total costs, are continuing to rise. According to a study released September 2006 by the U.S. National Association of Manufacturers (NAM), The Manufacturing Institute, and the Manufacturers Alliance/MAPI, structural costs increased from 22.4 to 31.7 percent of the total costs, compared to similar costs for similar companies in nine trading partner countries in 2003. “(This) sharp rise in these non-wage costs represents a significant and long-term problem for our nation’s manufacturers and America’s economy,” said John Engler, President of the NAM. These increasing structural costs harm workers and threaten competitiveness because they prevent job creation and take valuable funds away from research and development and worker training. Without investment in these three areas, manufacturers cannot realize growth. While manufacturing has rebounded from the protracted slowdown of the early 2000s, the underlying pressures on U.S. manufacturers have not abated. Surprisingly, the largest contributor was the corporate tax rate, responsible for one-third of the increase. Higher energy costs also contributed significantly to this challenge for U.S. employers. Historically---in the mid 1990s, natural gas pricing had been a competitive advantage for these companies, costing on the average 30 percent less than the trading partners had faced. As the average cost of natural gas for the nine major trading partners shifted to 0.7 percent below the price paid by U.S. manufacturers in 2005 that competitive advantage flipped to a disadvantage. Other increasing structural costs include those for pollution abatement. Since the year 2000, these costs were found to have increased by 11.5 percent, increasing the U.S. excess cost burden by 1.7 percentage points relative to its major trading partners. Add to all of these increasing costs, escalating costs in insurance benefits and it’s easy to understand the predicament in which U.S. manufacturers find themselves. Many are struggling to embrace technology fast enough to make these differences. The problem is that embracing technology requires upskilling the labor pool and those funds have been reduced, rather than increased. Expect these costs to continue to rise across the developed world. © Copyright 1998- by The Herman Group, Inc. -- reproduction for publication is encouraged, with the following attribution: From "The Herman Trend Alert," by Roger Herman and Joyce Gioia, Strategic Business Futurists. (800) 227-3566 or http://www.hermangroup.com. The Herman Trend Alert is a trademark of The Herman Group, Inc." WHO SENDS OUT YOUR NEWSLETTERS? We are convinced there is no better choice than ours! We have happily used DataBack Systems to deliver The Herman Trend Alert for over 10 years and. Visit their website (http://www.databack.com) or call Byron directly at 503.941.0427. You'll be glad you did. IS YOUR EMPLOYER AN EMPLOYER OF CHOICE®? Our effective, onsite seminars, workshops, and consulting can help you get there. We offer 1-, 2-, 3-hour, and full-day programs to help you communicate what it takes to become an Employer of Choice® and inspire your folks to get it done. In the future, being an Employer of Choice® will not be optional. Call Carol at 336-210-3547 to arrange a no-obligation conference call. Or order the electronic version of the Employer of Choice book on your desktop for only $17.80 @ http://hermangroup.com/store/books_all.html#2. STRUGGLING TO FIND THE PEOPLE YOU NEED? VETJOBS CAN HELP! Recently, hundreds of thousands of jobs remain unfilled due to a lack of capable people. If you are looking for qualified candidates, you need to hire a veteran using VFW-sponsored VetJobs, the largest military employment site on the Internet. Thousands of returning veterans are looking for good jobs now. Mention this ad in The Herman Trend Alert and receive a 10% discount on job postings. Call Ted Daywalt at 877-838-5627 or inquire at info@VetJobs.com. Herman Trend Alerts are produced by the Herman Group, strategic business futurists, Certified Management Consultants, authors, and professional speakers. New subscribers are welcome. There is no charge for this public service. The Herman Trend Alert is received by over 30,000 subscribers in 78 countries, in addition to other websites and printed magazines. Do you enjoy receiving this weekly e-mail update? Contact us about our co-branded Trend Alert service. Click here to sign up for the Herman Trend Alert. Subscribe or Unsubscribe to weekly Herman Trend Alert View this week's Herman Trend Alert Archived Weekly Herman Trend Alerts

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