American Manufacturing Is Back?

From James Surowiecki in the New Yorker:

Meanwhile, the outlook for industry is better than it’s been in a long time. American manufacturing was decimated during the first decade of this century, with six million jobs gone, and it was easy to believe that manufacturing was a lost cause. Yet it still accounts for more than two trillion dollars in output, and American factories are still among the most productive in the world. What’s more, energy costs here are falling, and labor costs abroad are rising. Suddenly, the U.S. seems like a reasonably affordable place to make high-end products, like G.E.’s jet engines and gas and wind turbines. There’s a growing market for such products, too. As developing countries get richer, they’re spending more on power, transportation infrastructure, and health care. The energy sector, even with the recent drop in oil prices, has a voracious appetite for exploration and drilling. These are all industries that G.E. specializes in.

This kind of manufacturing, with its automated, high-tech factories, doesn’t create as many jobs as old-fashioned heavy industry, but the gains are still significant. In the past six years, G.E. has opened more than twenty new plants and added more than sixteen thousand new workers in the U.S. “We’re not talking about some nostalgic, morally attractive American folkway,” Muro said. “Advanced manufacturing is a major driver of innovative activity, exports, and economic growth. So it’s good to see a hallmark company refocussing on it.” After twenty-five years of the financial tail wagging the industrial dog, it’s time to try something new.

Posted by on April 28th, 2015 at 9:14 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.