Hong Kong: The inaugural Global Industrial Capital Expenditure Survey, released by Arcadis in Hong Kong, concluded that the industrial manufacturing sector is optimistic about 2017. The study reported that nearly 90 percent of the executives surveyed judge that the outlook for their industry will either improve or stay the same over the next 12 months. Only 10 percent hold the view that the manufacturing sectors will get worse in 2017. However, when it comes to making investments in their production facilities, the respondents were most concerned about the availability of funding, the lack of available talent and increasing production costs.
The survey was conducted amongst more than 70 executives at industrial manufacturers spread across the globe, all with a responsibility for managing their company’s capital delivery programs. Together, the respondents represented companies generating over US$300 billion in revenues each year, spanning diverse industry sectors in manufacturing & technology, including automotive, pharmaceutical, chemicals, heavy industrials and consumer goods.
Executives also highlighted a number of challenges that they are facing in managing their capital investment projects. The top five challenges which trigger catalysts for change were found to be:
- Availability of finance
- Lack of available talent
- Increasing production costs
- Demonstrating return on investment
- Quality of product
The report explores the best practices required for manufacturers to overcome these challenges in light of the upcoming fourth industrial revolution. Also known as Industry 4.0, the fourth industrial revolution refers to the forecasted digitalisation of the manufacturing value chain from start to finish. Covering principles including cost modelling, improving asset flexibility and utilising a sustainable approach, the report highlights seven key steps to improving capital investment returns.