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04/19/10
The State of Manufacturing: Not as Bad as You May Think
Filed under: Employment
Posted by: site admin @ 7:12 am

Good news for those interested in the ’state of manufacturing’ in the United States (that ought to be about everyone because of the trickle-up, trickle-down, and sideways effects on nearly all of us): According to David Huether, chief economist at the National Association of Manufacturers, “there is a misconception that the United States no longer makes anything.” Yet the U.S. remains the largest manufacturing economy in the world by a healthy margin. As recently as 2008, the U.S. accounted for more than a fifth (21%) of global manufacturing output, far ahead of the next two leading manufacturing economies (Japan, 13%, and China, 12%).

Another misconception is that the decline in manufacturing jobs has only taken place in the United States, when, in fact, is has been a global phenomenon, as increases in productivity have reduced employment needs in many nations (think: Best Practices, Lean, Six Sigma, Kaizen). Over the past 15 years, manufacturing jobs in China, South Korea, the UK, Japan, Germany, France, and Italy have also declined.

Finally, there is a belief that most of the job losses have been due to rising imports and a deteriorating trade deficit. That is not the case. Over the past 20 years, manufacturing employment has fallen by 6.1 million. Two-thirds of this decline took place in two recessionary periods (2001-02 and 2008-09), when there were deep declines in manufacturing production and imports generally fell due to the U.S. recession.

Okay, so that’s looking back. What about the forecast for the future? In terms of production employment, it is expected that employment gains in coming years will be specifically supported by exports (between 2003 and 2008, manufacturing employment supported by export grew by 446,000 jobs).

The most promising sectors of growth in the U.S. manufacturing industry:

The global economy, led by the developing economies, appears to be rebounding at a faster pace. As a result, manufacturers with a global portfolio are seeing activity pick up now. In general, this would include sectors such as:
* textiles
* primary metals
* machinery
* computer and electronics
* transportation products

In these areas, over a third of domestic production is supported by exports of manufactured products abroad. More details at: http://bit.ly/aGaYax.

Article extracted from the eBridge, newsletter of Career Management Alliance.

– Jan Melnik, MRW, CCM, CPRW, President, Absolute Advantage

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