Fiscal cliff fades into past as U.S. manufacturers look forward

January 23, 2013

With the fears surrounding the fiscal cliff taking on the guise of just a bad dream, the future of U.S. manufacturing continues to be bright.

According to Reuters, a number of leading firms have already forecast first-quarter earnings that will see them start the year in the right frame of mind, while manufacturing orders and workplace opportunities also appear to be on a steady upward trajectory. With 2013 less than a month old, it may be too early to be cracking open the champagne, but with so many other factors coming into play at the same time, the much-vaunted recovery is being felt across the country.

The feel-good factor isn’t just limited to the number of orders being placed or the decision of major companies to increase the domestic nature of its supply line. The housing market has continued to show growth and consumer spending is also seen to be increasing in the early part of the year.

While the fiscal cliff remained a potential obstacle to be hurdled, U.S. manufacturers were cautious in their approach to the next fiscal year, with many of them remaining committed to the principles of lean enterprise that had served them so well in the past.

However, this commitment to a lean manufacturing method of production was vital to the rebirth of the industry over the last few months, demonstrating to overseas competitors in China and the Asia-Pacific region that “made in America” was as much a guiding principle as a well-placed sound-bite. Recent reports seem to have borne this out, with the Association of Manufacturing Technology (AMT) recently revealing that new orders in its sector of the industry were on target to be higher than in 2011.

“Orders for all of 2012 remain full steam ahead, likely on pace to pass the totals of 2011 and echoing the overall strength of manufacturing for the year,” said Douglas K. Woods, AMT President.

More significant perhaps was the release of data compiled by Manufacturers News, which showed that 28 out of the top 50 industrial cities in the U.S. all posted gains in manufacturing jobs in 2012. Companies in Houston, New York, Grand Rapids and Louisville all contributed to the overall increase, showing rises of anywhere between 3 percent to 7.3 percent.

“What we see in the economy in the U.S. is that the rebound in the housing market is really having a pull-through effect on the rest of the economy,” said Greg Hayes, chief financial officer of United Tech, in an interview with Reuters. “Commercial construction is coming back.”