Engineered Products: Insights from our Pulse-Check H2/2024

Here are our 5 Key Insights in H2/2024:

• Market Variability: The engineered products sector is experiencing significant variance, with slightly lower but still high order volatility. To effectively manage this, flexible, scalable operations and targeted cash flow optimization – like Net Working Capital (NWC) – are essential

• Cost Management in Focus: Over the next few months, companies are prioritizing cost-saving over strategic investments, reflecting a cautious market sentiment. This focus on immediate profitability means investments in sustainability and product digitization are currently on hold

• Key Cost Drivers: Raw material costs remain a major expense, while SG&A (Selling, General, and Administrative) costs are on the rise. Effective strategies in procurement and operational excellence are vital for reducing these expenses and improving EBIT margins

• Digital Transformation Trends: Automation and Generative AI are high on the agenda for decision-makers. Simultaneously, circular economy approaches offer potential long-term cost advantages and resilience in supply chains while not yet on the agenda of decision-makers

• Progress in Circular Economy Initiatives: An increasing number of companies are implementing circular economy strategies, though many remain in the planning phase. This highlights a need for broader management understanding of benefits to drive these strategies forward