On July 1, 2016, the Institute for Supply Management announced the manufacturing index rose to 53.2 in June, reports The Chronicle Herald, alluding to a potential increase in overall U.S. GDP, which holds major hopes for the future of manufacturing. Yet, the renewed scrutiny of Clinton for her emails and unstable politics continue to frighten many U.S. manufacturers into beliefs of an impending recession. While the future of manufacturing in the US has yet to be written, the overwhelming amount of evidence points toward a fresh, growing industry into the remainder of the year. As a result, you need to understand how this growth is happening.
The conversation over reshoring versus offshoring dominates much of the news, but American companies have split their workforce by half between inside and outside of the U.S., reports Chriss W. Street of Breitbart. According to Bureau of Economic Analysis, the U.S. deficit between exports and imports was “only $1 billion more than expected,” adding to the prosperous outlook for the industry. Yet, further evidence of continued growth of manufacturing in the US can be seen in the following infographic, created by MP Star Financial:
Since 1991, the U.S. manufacturing industry has lost more than 5 million jobs, and it has struggles throughout two recoveries and one recession since that time. The first recovery was from 2001 to 2007, but it was halted with the Great Recession of 2008. The path toward recovery began in 2009 under President Obama, and 2016 marks seven years since it began. Ironically, the same time frames for recovery does not necessarily mean a recession is imminent.
The candidates for this election year also have similar policies with respect to manufacturing in the US. Both Clinton and Trump are renewing calls to end trade agreements, increase reshoring and encourage, if not penalize, manufacturers who continue to send jobs overseas. Now, some evidence does suggest a slight slowdown in specific manufacturing sectors, such as the auto industry, explains Joel Kotkin of Forbes magazine.
Rather than using this information as a call to panic, it simply should be taken at face value. In other words, auto manufacturing traditionally decreases during the summer months as manufacturers begin working on new models or designs for the upcoming year. Essentially, slight slowdowns are routine occurrences during the summer months in the auto industry. Further proof of this concept can be found in areas of the Midwest that are experiencing significant declines in unemployment rate to near all-time lows.
Manufacturers have an opportunity to drive growth in the U.S. economy throughout 2016 by actually using resources within the U.S. and working to change perception and legislation about the industry. Some of these measures, reports Supply Chain Digest, include the following:
Today’s manufacturing industry is nothing like the manufacturing industry of the past. It is on the mend, preparing for growth and experiencing growth despite fears, criticism and some deficits. However, manufacturers are in a position to further drive growth, and all indicators point toward an upward direction for prosperity, and today is one of the most interesting times to be involved in the supply chain and manufacturing industry.
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