OESA Supplier Barometer: Optimism Recovers Even as Supply Chain Pressures Persist

For Immediate Release                

Contacts:
Jeff Laskowski, 248.430.5951, jlaskowski@oesa.org
April Buford, 248.430.5964, abuford@oesa.org

OESA Supplier Barometer:  Optimism Recovers Even as Supply Chain Pressures Persist

SOUTHFIELD, Mich. (Aug. 4, 2021) - According to the Q3 2021 OESA Automotive Supplier BarometerTM Index (SBI) – a gauge to measure the sentiments of North American automotive supplier executives – there is continued disruption to the automotive supply chain. Disruptions caused by input shortages and the subsequent shutdowns of numerous OEM production facilities, weigh on the optimism of supplier executives despite a strong U.S. economy. Net results indicate an improved reading of 52, an increase of 8 points from the second quarter reading of 44, and 2 points above a neutral reading of 50.

The Q3 2021 OESA Automotive Supplier Barometer, sponsored by RSM US LLP, focused on Talent and Human Resources. The results indicate: 

• Production shutdowns stemming from supply chain shortages and issues, as well as the inability to fulfill customer volumes, continue to be the top threats to the industry over the next 12 months. Yet, they have eased marginally. Labor constraints and sales of vehicles in programs supplied are a growing concern. Suppliers are confident in the strength of the U.S. economy as issues related to the pandemic continue to be less threatening to the supply base and the overall economy.
• Skills and company cultural gaps widened, as suppliers realize their workers expect a continuation of flexible work arrangements. Suppliers are focusing on increasing internal skills development and changing hiring practices to offset skills gaps, while offering flexibility in work environments and relying on leadership to drive cultural change.
• Scarce labor availability and competition from other sectors accelerated hourly employee turnover to extremely high levels. Suppliers are increasing wages and relying on contract employees to offset the shortage of production workers. Signing and retention bonuses were indicated the most successful incentive initiatives.
• Cost pressures are mounting as the supply base is budgeting for a 5.4% and 2.9% increase next year to hourly and salary employee wages, respectively. Additionally, suppliers expect pricing pressure across all other benefit offerings.

“Executive sentiment rebounded into positive territory, despite 1) workforce pressures resulting from the pandemic and 2) the accelerating pace of industry change, contributing to growing gaps between responsibilities and skills across the supplier ecosystem,” said Mike Jackson, executive director, strategy and research, OESA. “Suppliers are battling increased turnover, most acutely within their hourly ranks, though supplier resilience continues to shine, with 91% of suppliers actively pursuing efforts to bridge these skills gaps while elevating the role of technology to enhance employee flexibility to attract, retain and empower employee success,” Jackson said.

The Q3 SBI chart and a full copy of the Supplier Barometer results are available on the OESA website at: https://www.oesa.org/resource/oesa-automotive-barometer-studies.

CLICK HERE to view the RSM US LLP commentary on the Q3 2021 OESA Supplier Barometer results. 

About the OESA Automotive Supplier Barometer:     

The OESA Automotive Supplier Barometer captures the pulse and analyzes the twelve-month business sentiments of top executives in the supplier industry.  It is a quarterly survey on commercial issues, the business environment and strategies that influence the supplier industry. This Barometer is distributed to vehicle manufacturers, financial institutions, governmental officials and the media to provide an on-going profile of supplier industry trends.

About OESA
The Original Equipment Suppliers Association’s mission is to champion the business interests of automotive original equipment (OE) suppliers. Since 1998, the Association has been addressing issues of common concern and advocating on behalf of the supplier community throughout the supply chain and in Washington, D.C.

OESA is one of four divisions of the Motor & Equipment Manufacturers Association (MEMA). All divisions are represented by MEMA’s advocacy and emerging technology expertise.  For additional information, visit http://www.oesa.org.

About RSM US LLP
RSM US LLP is the leading provider of audit, tax and consulting services focused on the middle market, with nearly 10,000 professionals nationwide. It is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 41,000 people in 116 countries. RSM uses its deep understanding of the needs and aspirations of clients to help them succeed.

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