US Manufacturing Climbs Again in May

Matt Shelly
Posted by in Manufacturing


With Chinese labor costs rising, U.S. exports are rising, growing seven times faster than the gross domestic product since 2005, according to Boston Consulting. In May 2014, CNBC reported that America's manufacturing sector was making a comeback with small and mid-sized businesses increasing output as part of their overall growth strategies.

U.S. manufacturing grew for the third month in a row in April 2014. According to the Institute for Supply Management, national factory activity increased to 54.9 on its index in April over 53.7 on its index in March. Index readings above 50 reflect expansion in the sector.

Today, the United States and China export costs, which include expenses related to transportation, energy and wages, differ by fewer than five points, whereas 10 years ago that number was 14 points, reports the Boston Consulting Group.

Many relatively small companies in the United States are exporting to international markets, earning attractive profits and helping to lead post-recession job recovery, thanks in large part to e-commerce and improved access to ports. Such companies are brokering deals with businesses overseas to ship everything from lumber to glass.

Read the international news for tips on what products various countries need. For example, if you see that there has been a tsunami or another devastating natural disaster in a given geographical area, you are safe in assuming that rebuilding efforts are likely to require everything from lumber to electrical components. Articles about impending construction of a large data center or another facility in a foreign country serve as leads if your company manufactures any needed building materials likely to be used in such a venture.

The United States once led the world in the number of manufacturing jobs it offered. However, in the 1970s and 1980s, many of these jobs were relocated overseas, which led to massive scaling back at domestic factories.

Today, that trend is reversing itself. Many of the states that were hardest hit by outsourcing are beginning to see more action at their manufacturing plants. Georgia, for example, saw a 1.6 percent increase in manufacturing jobs between 2012 and 2013 with the expansion of Kia Motors in the state. That increase equated to about 7,000 new manufacturing jobs.

Brooklyn, N.Y. is experiencing its own manufacturing boom. Its output is double that of the rest of New York City. Brooklyn's apparel plants are responsible for much of the recent increase in manufacturing output.

Economists who focus on the manufacturing sector predict that the United States' advantages in terms of energy and wage growth, combined with stable foreign-exchange rates, are likely to enable the country to continue to expand its manufacturing operations in decades to come. U.S. manufacturing businesses can expect strong growth if they court international markets.

 

(Photo courtesy of (koko-tewan)/ freedigitalphotos.net)

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