The Institute for Supply Management (ISM)
produces a monthly Manufacturing Index that reviews growth or contraction
within the manufacturing sector. The report is based on surveys of hundreds of
manufacturing firms about recent employment and production trends, inventories,
new orders, and supplier deliveries.
The Manufacturing Index is calculated on a
scale of 0 to 100. A score of 50 or more points suggests that manufacturing is
expanding, while a score below 50 points indicates contraction.
After declining to just 32.4 points in
December 2009, the Manufacturing Index has risen significantly over the past
decade, reflecting increased confidence throughout the manufacturing sector. In
May, the index registered 60.2 points, an increase of 1.5 percentage points
from the previous month and the twenty-second consecutive month of
manufacturing expansion.
Such growth is likely to continue in the
coming years. Indeed, 2017 marked the first year in which more manufacturing
jobs were created in the US than offshored, a potent reminder that
manufacturing has largely recovered from the dark days of the Great Recession.
Which
Regions Are Seeing the Most Manufacturing Growth?
Forbes recently published its own regional analysis of manufacturing growth in
the US since 2012 by examining data on 373 different metropolitan statistical
areas. According to its data, the largest manufacturing regions in the country
are largely located in the South:
1.
Orlando-Kissimmee-Sanford,
Florida. Manufacturing jobs in Central Florida
have grown by 23.6% on the strength of large companies such as Lockheed Martin,
Mitsubishi Hitachi Power Systems Americas, and Siemens Energy.
2.
Oakland-Hayward-Berkeley,
California. Factory jobs in the Bay Area have
increased by 22%, fueled largely by the manufacturing needs of the tech
industry.
3.
Grand Rapids-Wyoming,
Michigan. The number of industrial jobs in West
Michigan has risen by 20.5%, amounting to a fifth of all non-agricultural jobs
in the area.
4.
Miami-Miami Beach-Kendall,
Florida. Factory-type jobs in South Florida have
grown by 22.6%, reflecting Florida’s generally favorable conditions for
manufacturers. Indeed, the state’s sector manufacturing has recorded growth for
86 consecutive months.
5.
West Palm Beach-Boca
Raton-Delray Beach, Florida. The number of
manufacturing jobs in Miami’s northern neighbor has risen by 27.3%. In general,
Florida is a strong state for manufacturing because of its lack of an income
tax, relatively low housing costs, and pro-development policies.
Why It
Makes Sense to Invest in Manufacturing
While American manufacturing is currently
enjoying sustained growth and development, the sector could expand further in
the coming years. A strong manufacturing sector in the US should encourage
competition from rapidly developing countries such as China and India, providing
American manufacturers with the opportunity to further improve the quality of
their products while reducing operating costs.
The revival of American manufacturing will
largely depend on the state of the country’s infrastructure. Because American
manufacturing largely depends on the country’s energy, transportation, utility,
and communication systems, reduced spending on infrastructure poses a
significant restriction on the sector’s future growth. With robust investment,
however, manufacturing will likely continue to grow at its current pace.
In an increasingly digital economy, manufacturing
continues to spur more economic activity than any other sector, with every
dollar spent on manufacturing generating another $3.60 in economic activity.
Having seen an increase in orders from manufacturing companies ourselves, we at
PEER Bearing remain deeply committed to advancing it however we can. If your
company is looking for a manufacturing partner to fulfill its bearing needs, contact us
for more information.
