U.S. Manufacturing Continues to Lift Up the Economy

Manufacturing continues its ascent, lifting up the US economy at a record pace.

 

In a recent report from the Federal Reserve’s “Beige Book,” overall economic growth was adjusted down for April / May of 2018 with a relatively meager 2.2% growth rate. However, manufacturing in the US showed “strong gains” despite these adjustments.

 

Also, even with recent uncertainties around renegotiated trade pacts with various countries, US manufacturing remains a growing, resilient dynamic for the US economy.

From the report on 21 May 2018:

 

“Manufacturing shifted into higher gear with more than half of the districts reporting a pickup in industrial activity and a third of the districts classifying the activity as 'strong.’”

This news adds to an upward trend for US manufacturing not seen in years. Along with positive news from the Fed, other trends and developments suggest we’re in the middle of a relative renaissance for business conditions for US manufacturers.

 

JOBS JOBS JOBS

Since the elections of November 2016, US manufacturing has added approximately 300,000 jobs, with 196,000 added in 2017 alone. This trajectory bodes well for custom manufacturers looking to seize upon new opportunities, business, and prospects.

 

 

RESHORING AND FOREIGN / DOMESTIC INVESTMENT

Due to many factors – including passage of an ambitious new tax bill and eased regulations – the US is attracting substantial investment that will directly benefit the entire manufacturing value chain. Consider:

  • Apple is set to “invest tens of billions on domestic jobs, manufacturing and data centers in the coming years.” This plan will also generate 10s of billions in tax revenues for the US. (Hey, someone has to build those servers and the facilities that store them.)
  • Ford Motor Company pulled the plug on a planned, $1.6-billion Mexican facility, and instead will spend $700-million to expand its Flat Rock, Michigan, facility and create 700 manufacturing jobs to build autonomous, hybrid, and electric cars in the US.
  • Lockheed Martin agreed not only to lower the cost of the F-35 fighter jet but also committed to adding 1,800 additional workers in Texas to produce the next-generation aircraft.
  • Hyundai has committed to spend $3.1-billion over the next 5 years to retool existing US facilities, ramp up research into next-generation automobiles, and it is considering building a plant in the US specifically for luxury cars for the North American market.
  • SF Motors – a builder of electric cars with facilities in the US and China – recently announced it will invest $160-million to purchase and equip a plant in Indiana, creating nearly 500 manufacturing and support jobs by 2020.

 

The list goes on. But also worthy of note is the “downstream” jobs these initiatives and investments will create. Custom parts manufacturers will find more opportunities to capitalize on them to grow their own businesses.

 

As uncertainties swirl while trade is being redefined by the current administration, one thing is clear:

 

Small to medium-sized manufacturers should step up marketing efforts NOW to ensure they reap the benefits as large, multi-national manufacturing corporations shift capital, investment, and production to the US.

 

Are you ready?