OUR THOUGHTS ON:

The New State of Manufacturing

International|Manufacturing

By Mary Richter

PRIMARY CONTACT: Mary Richter CPA (Pittsburgh)

And the pendulum swings.   After two (or more) decades of moving production off-shore, U.S. manufacturers have started bringing production back home.  There have been a number of prominent company announcements - Whirlpool, Honda, and Maker’s Mark have all announced expanded U.S. manufacturing.  Google has announced plans to build a $400 million plant in the U.S.  Even Walmart, long criticized for promoting foreign inexpensive products, has begun a campaign to increase sales of American- made goods.

As of the end of 2013, manufacturing employment was at its highest since 2009.  Most of this increase has been in the traditional manufacturing states of the Midwest and Southeast.  Driven by food, durable goods and OEM auto manufacturing, U.S. manufacturing employed approximately 12 million workers at the end of 2013.  This is still a long way from recent high watermark levels in 2004 of 14.3 million jobs.  By contrast, manufacturing employment in the 1990s was $17 million. (Source: U.S. Bureau of Labor & Statistics).  Retiring workers, automation and offshore production absorbed most of those jobs.

Certainly, the state of manufacturing has changed in the past ten years.  Technology and improved processes have driven costs (including personnel) out of the production chain while increasing productivity.  While manufacturing may have declined in numbers of employees, profits continue to rise, and many factors make the U.S. a viable choice in which to increase production.   Maybe free- market economics really does work.

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