The state of the economy has always been a reflection of the strength of the manufacturing industry in the US. Rebounding from the economic downturn, many people rely on a thriving state of manufacturing for their own growth and security. News of this industry has been varied lately, ranging from trepidation to abundant optimism. Despite some of the greatest concerns the industry is facing, like grooming a new generation of manufacturers and the Regulatory Accountability Act, the manufacturing industry is on track to rise to glory once again.
A move back to the US
Despite concerns about manufacturing in other countries, the US is actually one of the top exporters in the world. Furthermore, reshoring has been a hot topic lately – companies are either bringing their facilities back to the US or planning to expand and open here. Apple, Ford, Whirlpool, and General Electric are all on the list of companies planning to bring more work back to the US.
The movements to buy American have also been gaining momentum over the last several years – so much so that Wal-Mart has announced an initiative to support the cause. The retail giant will be investing $250 billion in products over the next ten years that support American jobs. This will be accomplished by: A) buying more of the American-made products already in stores; B) introducing “new to Wal-Mart” US-manufactured goods; and C) facilitation and accelerating the efforts of their suppliers to reshore.
The energy boom
Oil fracking technologies have created a boom in US oil and energy production that is also painting a promising picture for America. In the inverstorplace.com article, “How the New Energy Boom Helps Manufacturing,” Louis Navellier writes, “The result is putting the U.S. on the path to not only energy independence, but also economic independence, as experts estimate that this new boom will create more than 3 million jobs in the next seven years and will generate $2.5 trillion in tax revenues.”
As a result of the boom, the price of natural gas is lower than it’s been in a decade. Considering the amount that Americans spend on energy, the price of natural gas has a direct impact on the economy. Americans have more discretionary income to buy the things they’ve deprived themselves of for the last several years. The ripple effect of this “extra” income extends not only to manufacturers and retailers via increased spending, but also an increase in American jobs. Navellier postulates that the energy boom will also allow the US to become a cheaper place to manufacture goods.
While resisted by many, automation is an exceptionally promising sector that is slated to boost manufacturing. Contrary to the belief that automation will eliminate jobs, Reed Langston of Modern Materials Handling points out that it does just the opposite in his article, “Other Voices: let’s think of automation as a key to growth.” Langston states: “Before the 20th century, most people in the Unites States were farmers. If they were told that at the start of the 21st century, the necessary farm production could be accomplished by roughly 2% of the population and automation, the concern would be that those 2% would have all the wealth and the rest of the population would be unemployed and destitute. We know that’s not what happened. In fact, the improved technology in agriculture freed up the resources that gave birth to the industrial revolution and the technology and new industries that grew from there.”
Automation will actually create more jobs that don’t yet exist, and these jobs will be higher paying. Also, automating jobs will also make them safer. Companies will be relieved of hefty costs associated with injuries – medical expenses, time lost, workers’ compensation, and insurance hikes. On top of that, workers will be spared of these life-altering traumas, extending their careers and quality of life.
According to Langston, lower prices, higher wages, and higher profits will all come on the heels of automation in the manufacturing industry. Prices and services will be more competitive for consumers. Indeed, some jobs will be obsolete as a result of automation, but the big picture holds great benefits for the US economy and workforce overall.
Manufacturing is ever changing to keep up with the evolving demands of consumers. Technology is rapidly shaping our expectations as buyers; access to information and instant gratification make us very different from the society we were 30 years ago. By keeping up with the progress of society and technology, manufacturing is rising as a strong, efficient, and profitable powerhouse once again.
Packet is a strong advocate of US manufacturing and believes that business that are flexible and continue to adapt to changes will thrive.