CEO of Siemens confident that U.S. manufacturing revival will continue
U.S manufacturing seems poised to continue its revival after orders for durable goods were shown to rise in December.
According to Bloomberg, the industry stabilized after a mid-year slump with preliminary figures showing that demand for U.S. products increased by 2 percent at the end of last year, following a 0.8 percent rise in November. Economists believe that some of the recovery can be attributed to the rise in automobile sales and the resurgence of the housing market, with companies hoping that lawmakers in Washington, D.C., act quickly to resolve any outstanding issues arising from the fiscal pact deal signed on January 1.
“Manufacturing is looking better,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. “Demand has been improving nicely.”
Economists have also projected that GDP rose in the last quarter of 2012, with consumer spending, corporate investment and housing all contributing to a potential expansion of 1.2 percent. Overseas growth, a continued commitment to lean manufacturing and the decision by some major firms to reshore in the near future have also helped perpetuate the belief in a manufacturing renaissance, with one industry leader claiming that the U.S is the “least risky place in the world to do business.”
Eric Spiegel, the CEO of the U.S. subsidiary of Siemens, made this assertion in a recent speech to engineering students at Pennsylvania State University, crediting the abundance of cheap fuel and a commitment to quality management in manufacturing as prime factors in the “re-industrialization” of the country.
“The traditional view that manufacturing is cheaper overseas is changing,” Spiegel said. “Increased U.S. worker productivity, coupled with rising costs to build overseas, have made manufacturing in America much more appealing. We think the time is right to bring manufacturing back to the U.S.”
Speigel’s views are borne out by a number of manufacturing trends that have strengthened the standing of the industry in the global marketplace.
U.S. manufacturers such as General Electric and Boeing have already reported that fourth-quarter financial results have exceeded expectations, with the aircraft manufacturer revealing that it received 183 orders in December. A rising demand for automobile parts saw DuPont, the largest U.S. chemical manufacturer, announce that sales in 2013 were expected to be just short of $36 billion while overseas markets such as China are seeing an increase in demand for products that are “made in America.”
“We saw real strength in the emerging markets and the developed regions stabilized,” Jeffrey Immelt, CEO of GE said on January 18. “We entered 2013 with substantial momentum following solid order growth in five of the six businesses.”