David R. Brousell walks us through what he perceives will be manufacturers’ confidence levels, business prospects and tech budgets in 2006. Brousell has been the editor in chief of Managing Automation magazine since 1998 and a technology journalist since 1978.

How will the new year shape up for U.S. manufacturers? Should we expect just a continuation of what happened in 2005, or does 2006 hold the promise of much more?

Let’s start by assessing the mood of U.S. manufacturers about the economy and the state of their own businesses as 2006 begins. A new Managing Automation magazine reader poll published this month shows a mixed picture: while recent, economy-damaging events such as Hurricane Katrina have caused concern, most manufacturers are not quite ready to say their own business prospects have dampened as a result.

In fact, most companies remain bullish about how they will do in 2006. And once again this year, they intend to spend more money on advanced technologies as they look to become more agile in many facets of their operations.

Could this scenario change as 2006 unfolds? Sure, if energy prices spike upwards and a harsh winter develops, manufacturers could be forced to cut back on technology projects and spending. But right now, 55 percent of manufacturing companies participating in the MA poll said they would increase tech spending in 2006, almost the same as last year’s 58 percent indicating increases. That’s two back-to-back years of tech spending improvements, compared with depressed budgets during the recession.

Predictions on where this money will be spent reveal an industry keenly focused on using technology to compete in a global market. Enterprise resource planning software, even after years of adoption by companies, is still a hot ticket for many, particularly in the small and mid-size manufacturing market. Sales of business intelligence software and manufacturing intelligence software, programs that enable managers to make sense of reams of data coming from plant floor systems as well as ERP and other systems, will also be pronounced in 2006.

But the most important development in 2006 won’t be a discrete purchase of one software product or another or a revamp of a production line or a supply chain. I predict that the most significant development of 2006 will be a series of developments to lay the foundation for a new way of doing business based on a combination of business process re-engineering and Internet-based technologies.

What the poll shows under its covers, and what other work both confirms and expands upon, is that manufacturers both large and small are beginning to overhaul their technological infrastructures based on a new set of emerging, standards-based protocols and technologies that will enable them to automate their business processes both inside and outside their four walls.

The objectives are to become better connected business-wise, to enable them to collaborate more effectively in a global market where core competencies are being re-thought and outsourcing and offshoring has become commonplace, and to realize the true meaning of being customer-focused, a discipline that requires mastery of mountains of data about buying habits, preferences and patterns.

The new year will see a surge of interest in what are known as service-oriented architectures (SOAs), software frameworks based on open, Internet-based standards to tie together business processes. In fact, the aforementioned 2006 MA poll shows a doubling in the number of manufacturers saying they will investigate SOAs in 2006.

As manufacturers march along this advanced technology path, you will hear more and more discussion this year about the notion of business agility — what it means, how to become more agile, where to apply it in a manufacturing setting and how to measure results.

Barring any major economic reversals, or disruptive social or political events, the new year will shape up to be a pivotal one for the manufacturing industry — one in which companies undertook serious steps to ascend to a new level of competitiveness based on the possibilities afforded by a new generation of technology.

It is going to be a fascinating year of experimentation, learning, mistakes and inexorable advancement. Who wins and who loses will be determined by boldness of vision and the stamina to see things through.

David R. Brousell has been editor in chief of Managing Automation magazine, part of Thomas Publishing Co., since 1998, a technology journalist since 1978, and the author of the Brousell Blog, a “Discussion of Business & Technology Issues Critical to Manufacturers.”