U.S. manufacturing is in a stage of growth. As of 2014, manufacturing declines in Europe and Asia and new initiatives to speed industry growth in the United States show promise of moving the U.S. manufacturing sector into a new growth stage with increased innovations and job creation. Prospects for government funding for work force development, on-site innovation teams and low-cost energy initiatives may propel manufacturing to new heights in the future.
The Purchasing Managers' Index issued by the Institute of Supply Management is used to measure manufacturing growth. The PMI represents a composite picture of manufacturing orders, production, employment, inventory levels and supply shipments. Numbers over 50 represent growth in the industry, and the yearly average PMI has remained above 50 since 2010. In August 2014, the PMI hit a 3-year high of 59, rising 1.9 points from the previous month. Orders were also up to 66.7 percent from 63.4 in July. A strong increase in new orders is a prediction of future growth as U.S. manufacturing companies ramp-up production to meet demand.
September 2014 saw a slight decline in the PMI back to 56.6, which still represents steady growth in the manufacturing sector. Production totals for September were up slightly, and the lower PMI possibly represents a labor shortage or a response to political unrest in other parts of the world. Labor shortage concerns are being addressed regionally and nationally by new education and training initiatives designed to provide the skilled workforce with the necessary means to meet the needs of contemporary high-tech manufacturing operations. Federally, the Workforce Innovation and Opportunity Act provides funds and support for public-private partnerships to create manufacturing training programs that combine classroom knowledge with hands-on work experience for workforce development. The unskilled factory workers of the past are being rapidly replaced by a new tech-savvy workforce trained to handle an increasingly computerized, automated factory environment.
Globally, many East Asian nations, including China, South Korea, Indonesia and Japan are seeing manufacturing slowdowns in 2014. Political tension in Europe is leading to decreased manufacturing output from that region also. U.S. manufacturing is primed to step up and fill in the gaps created by reduced manufacturing activity in other parts of the world. The Revitalize American Manufacturing and Innovation Act of 2013 sets up university-industry partnerships to drive industry growth with new innovations. Other legislation provides manufacturers with tax incentives to keep factories in the United States, grants to improve global competitiveness and measures to help the industry reduce energy costs while decreasing their environmental impact. This increased government support provides further incentives for manufacturers to keep their operations in the United States.
U.S. manufacturing is primed to enter a new-growth state with better job-growth rates and increased production levels. New openings in the U.S. manufacturing sector and increased training opportunities in the manufacturing field are contributing to this steady growth rate. Overall economic growth in the United States and legislation supporting the growth of advanced manufacturing are creating the ideal environment for companies entering the manufacturing arena.
Photo courtesy of Stuart Miles at FreeDigitalPhotos.net
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