We’ve been hearing a lot lately about how American manufacturing is making a comeback. Last year was particularly hailed as a “manufacturing renaissance,” as the sector led the way for economic improvement and consistently racked up positive industry stats. Manufacturing has been roaring back… but will it continue on this path?
Simply put, the answer is “yes!” The time has come for American manufacturing to thrive and it doesn’t show signs of slowing down. While there will always be minor blips in the road, report after report, and survey after survey, demonstrates that the manufacturing sector is improving.
Just recently, Industry Week published a report by the Manufacturers Alliance for Productivity and Innovation (MAPI). Its quarterly Economic Forecasts predicts that while “inflation-adjusted GPD will expand by 1.8 % in 2013 and 2.8% in 2014,” manufacturing production will do better than the rest of the economy and is “expected to show growth of 2.2% in 2013 and 3.6% in 2014.” Furthermore, “high-tech manufacturing production, which accounts for approximately 10% of all manufacturing, is anticipated to grow 4.3% in 2013 and 9% in 2014.”
The trade deficit is also a key indicator of manufacturing growth. The study found that the deficit is improving because of a growth in exporting. “Exports are anticipated to improve by 2.5% in 2013 and by 5.1% in 2014,” the study found. Recent reports from the U.S. Department of Commerce also found that the trade deficit in December was down from the previous month and from the previous year.
According to federal trade statistics, Michigan was one of only 11 states to post double-digit export growth last year. In 2012, Michigan ranked 8th in total merchandise exports with $56.9 billion, up 12% from 2011. Transportation equipment accounts for more than half of Michigan’s export dollars at $29.2 billion. Richard Corson, Director of the East Michigan U.S. Export Assistance Center, indicated that the exporting trend is certainly growing in Michigan.
Agriculture contributes over $71 billion annually to Michigan’s economy, making it the second largest industry. Second only to California in agricultural diversity, agricultural exports account for more than $1 billion annually and supports almost 15,000 jobs. In fact, export-supported jobs linked to manufacturing account for an estimated 6.4% of Michigan’s total private-sector employment.
A recent article by Site Selection magazine highlighted Michigan as 4th in the US in major new corporate facilities and expansions in 2012. New manufacturing facilities and/or expansions accounted for 74% of the 337 reported locations.
So statistics and studies are great – but what do they mean for Michigan’s manufacturers? What are the “action items” for Michigan’s manufacturers based on these trends?
It means that now is the time for manufacturers to capitalize on our industry’s improvement and implement changes to support business growth! Operating in a lean and efficient way should always be a top priority. However, maintaining “normal productivity” and doing “business as usual” shouldn’t be the only objective – companies need to develop new business!
Manufacturers can do this in numerous ways such as:
- Customer cultivation
- Increasing exports
- Developing specific growth strategies
- Investing in innovation
- Generating new leads
- Market diversification
- Conducting market research
- New product development
As Ben Franklin would put it, “In this world, nothing can be said to be certain but death and taxes.” But the swing towards American manufacturing pride is different this time – America is certain that it wants products made in the U.S… and our state’s residents want products made in Michigan! There is a renewed energy around U.S. manufacturing that we haven’t seen since the manufacturing boom of “the greatest generation.” In a recent NBC news report, of the growing pile of American-made goods, an increasing number are those made with recycled materials. Apparently, it’s easier to manufacture green products domestically because recycled materials including plastic are particularly plentiful here.
If you are a Michigan manufacturer, it is critical to invest in changes and initiatives to grow now. MMTC can provide assistance in numerous ways. For more information, click here to check out a list of our business development services.
Image by Workforce Intelligence Network.