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MEMA Original Equipment SuppliersOESA Supplier Barometer: Supply Chain Disruptions Weigh on Sentiment, Despite Strong Demand
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For Immediate Release
Contacts
Jeff Laskowski, 248.430.5951, jlaskowski@oesa.org
April Buford, 248.430.5964, abuford@oesa.org
OESA Supplier Barometer:
Supply Chain Disruptions Weigh on Sentiment, Despite Strong Demand
Supply Chain Disruptions Weigh on Sentiment, Despite Strong Demand
SOUTHFIELD, Mich. (June 2, 2021) - According to the Q2 2021 OESA Automotive Supplier Barometer Index (SBI) – a gauge to measure the sentiments of North American automotive supplier executives – increased disruptions to the automotive supply chain from input shortages, and the subsequent shutdowns of numerous OEM production facilities, weighed heavily on the optimism of supplier executives. Results indicate a net pessimistic reading of 44, a decline of 18 points from the first quarter reading of 62, and 6 points below a neutral reading of 50.
The Q2 2021 OESA Automotive Supplier BarometerTM, sponsored by RSM US LLP, focused on Supply Chain, Globalization, and Sustainability. The results indicate:
- Production shutdowns stemming from supply chain shortages and issues, the inability to fulfill customer volumes and labor availability are shown to be the top threats to the industry over the next 12 months and appear to be becoming more widespread and detrimental. However, suppliers are optimistic that demand for light vehicles in the U.S. remains strong due to the strength in the U.S. economy.
- Responses show that, over the past three months, 42% of suppliers have had a significant increase in sub-tier supplier distress, up from 34% over the past year, driven by capacity constraints and delivery issues.
- Suppliers have witnessed a continued effort to localize production from customers as they attempt to comply with standards in place from USMCA. Consequently, suppliers themselves look to localize within their own supply base to provide compliance value to their customers.
- Formal sustainability plans have been adopted by 47% of the supply base, and an additional 22% are in the process of developing one. Plans are centered on carbon reduction, neutrality goals, and eco-friendly material usage and product production.
“Despite these hurdles, the crisis has prompted leading suppliers to reinforce their supply chains. At the same time, suppliers must pursue a position of long-term strength by advancing EV strategies, innovation initiatives and digital transformation,” Jackson said.
The Q2 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 Q2 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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