工业品下一个领域的新规则

CONTENTSCONTENTS Challenges AndFocus PrioritiesP.13 ExecutiveSummaryP.4 Fundamental ChangesOn The HorizonP.17 IndustrySentimentP.5 Conclusion Tariffs AndSupply ChainP.9 Methodology OVERVIEW Of course, industrial goods is incredibly broad andvaried, comprising numerous subsectors that are eachcontending with their own unique set of issues. Thisyear we partnered with the Association of EquipmentManufacturers to take a deep dive into agriculture After a yearslong period of relative prosperity andconfidence, the always cyclical North Americanindustrial goods sector has hit a downturn. Where lastyear executives we spoke with gave a largely positive The heightened uncertainty also has furthered thetrend we saw in our previous report of industrialsgoing back to the basics. Increasingly, they’re turningaway from initiatives that in this environment mightcarry greater risk or complexity, focusing instead on Read on for all the vital data and insights, aswellas telling information about the broaderindustry. 02 EXECUTIVESUMMARY •Labor shortages and skills gaps are becominga bottleneck, while also serving as a catalyst for Sentiment decline:Even for an industry constantlygoing through cycles, the current downturn has beenfast and deep. On a scale of 1 to 10, executives onaverage gave industrials’ current condition aratingof 5.7, down from 8 last year. Sentiment was Doubling down on core elements:As high interestrates, inflation, and other economic factors threatentheir bottom lines, organizations are further increasingfocus on core products, operations, and customer •Adoption of digital tools for e-commerce, fieldservice, and other applications isgrowing •OEMs are shifting toward resilient strategies Changes on the horizon:All along the value chain, thelong-relied-on fundamentals of industrials’ business •Tensions are building between OEMs and suppliersover the responsibility for leading and paying Tariffs become a distraction:In our survey andinterviews, 68% of companies said tariffs have impactedtheir strategy moderately or more. The constant needto grapple with the disruption has caused short-term •Traditional dealers are being challenged by upstart Understanding these changes will enable anyindustrials business — big or small, OEM or supplier,agriculture- or construction-focused — to craft and •Customer segments are splitting between largeconsolidators and smalloperators 03 INDUSTRYSENTIMENT The core off-highway market — comprisingmachinery and equipment used directly in sectorslike agriculture, construction, mining, and forestry— represents a substantial but concentratedopportunity. For example, agriculture’s direct TotalAddressable Market (TAM) is $58 billion in equipmentspend; however, when the lens is expanded toinclude the broader ecosystem (primary agriculture $224 billion Expanded M arket ~$8 T rillion Construction$4 trillion As accustomed as industrial goods companiesmay be to changing business cycles, theycould scarcely be prepared for how the currentdownturn would play out. “This drop-off in That view is reflected in the low sentimentratings given by executives throughout theagriculture sector: The average rating for OEMswas 5.0, while the average for suppliers was 4.6 Exhibit 3:US net cash farmincome We may not be at thebottom of the trough, but — OEMexecutive Alongside the high volatility found elsewhere,agriculture has experienced an especiallyserious downturn, with prices of many cropsdeclining, net farm income tracking directly with Net cash farm income has always been notablyvolatile, but the most recent negative spike hasbeen particularly severe. Following a record$61 billion year-over-year decline, in 2023 USinflation-adjusted net farm income dropped to 04 TARIFFS ANDSUPPLY CHAIN It’s no shock that tariffs are proving a major painpoint for industrial goods firms. But the issue isn’talways simply the existence of tariffs; it’s often theknock-on effects from the uncertainty they bring.Executives said they are exhausted, and seemingly predict new trade rules and game out their potentialconsequences. “My concern is that’s time that is lost,”said one manufacturing executive. “You know that An extension of this distraction issue is that timespent on tariffs has left companies essentially stuckin first gear, with severely limited ability to focuson medium- and long-term planning. Our research For now though, many lament that discussions ofday-to-day business operations are falling by thewayside. In their place, firms are standing up “war The problem isn’t tariffs,it’sthat they change toofast — Propulsion systemssupplier Best-in-class companies are attempting toovercome that limitation, adopting tacticsaimed at combating tariff difficulties, quicklypulling themselves out of the downturn,and proceeding seamlessly afterwards. For It’s not just the top performers, however.Across the industry, organizations are takinga wide variety of actions in response to the