Is a Manufacturing Economy a Thing of the Past?

The American manufacturing sector used to be an economic lynchpin and the wellspring for thousands of production line jobs each year. Nowadays, the production industry seems a shadow of its former self. Many people believe that the "glory days" of manufacturing are over and that—particularly given overseas fabrication contracts—the US will never again see jobs in the industry recover to previous levels. The real situation, however, may be more complex than a simple shift in geological production preferences.

Technological changes, market shifts, and robotics have doubtlessly made an impression on the manufacturing sector over the last fifteen years. Shortly after the millennium, many US corporations outsourced production processes, sending them to countries such as China, India, and South Korea. Lower wages and fast turnaround times led to increased profits. In short, outsourcing seemed logical from a business perspective.

A simultaneous series of robotics developments led to improved automation techniques. Robots were available twenty-four hours a day, didn't require health insurance or paychecks, and were consistently accurate. Robotic technologies became less expensive to purchase and implement—and as they did, the manufacturing sector's human element began to dwindle.

At first glance, the situation in the manufacturing industry seems foreboding—but don't be fooled by a two-dimensional façade. Instead, consider a third element—the metallic silver lining of robotic activity, perhaps—alternative employment opportunities. In conjunction with the reshoring trend, brand-new robotics-centric jobs are breathing fresh life into the US production sector.

In February, National Association of Manufacturers (NAM) President and CEO Jay Timmons spoke at the State of Manufacturing address in Houston, Texas. According to Timmons, the US production industry resurgence is well underway, thanks in part to its vibrant workforce as well as its penchant for consistent innovation. If the Manufacturers Alliance figures were right, Timmons stated, manufacturing sector output had the potential to contribute $2.5 trillion to the US economy each year, creating 300,000 new jobs per annum in the process.

Industry insiders such as Timmons provide unique insight because of their experiences. It's also well worth looking at US and global manufacturing industry statistics, which contribute further evidence to the debate. The world economy is intricately linked across a network of countries, so when one country flourishes, that has a profound effect on other regions.

China, for example—once the go-to place for overseas production—has lost its competitive edge in recent years; indeed, the same applied to the rest of Asia. An emerging middle class, ironically driven by foreign investment, has leveled the playing field somewhat and slowed the growth of the Chinese economy. According to the HSBC composite index, India currently outpaces China in terms of manufacturing growth.

Purchasing Managers' Indexes (PMI) suggest an upswing for the manufacturing sector on a planet-wide level: in February 2014, the global PMI reached a 34-month high, indicating sustained recovery from the recession. Australia, Ireland, Turkey, Spain, Canada, and the UK were among the best-performing countries in manufacturing-sector growth.

Meanwhile, America's ISM index grew from 51.3 in January to 53.2 in February. Encouragingly, fourteen out of eighteen manufacturing subsectors reported growth, and the New Orders index increased by 3.3 percentage points in the same timeframe.

In conclusion, the US manufacturing sector indeed appears to be experiencing a comeback.  Robots are more common in the industry, but they've brought a new wave of jobs with them. Perhaps it's best to feel bolstered by the evidence and use industry change as an opportunity for personal and professional growth. Rather than a thing of the past, the manufacturing industry may be the wellspring of the future.

(Photo courtesy of Freedigitalphotos.net)