U.S. manufacturing rebounds, renaissance for sector targeted

February 13, 2012

Though the American economy is still in a recovery process, manufacturing in the country has seemingly survived the worst of the 2008 recession and is beginning to report growth.

According to McClatchy Newspapers, Michael W. McLanahan, the owner of a manufacturer that concentrates on mineral processing and farm equipment, said that his company experiencing a boom.

"It was our best year ever," McLanahan told the news source during a tour of his company's facilities in Pennsylvania. This may illustrate why the sector is growing twice as fast as the broader economy.

McLanahan noted that his company, and other manufacturers in the U.S., are benefiting from a revival in exports. The entire sector added more than 287,000 new positions over the past 13 months and is experiencing more growth in recent months, according to McClatchy Newspapers.

Despite the ongoing problems in Europe, U.S. exports to the region rose 3.6 percent in December, and 2011 saw the total exports from America rise 14.5 percent over the numbers that were reported for 2010.

"We can build here and ship into Australia for cheaper than they can make it there," McLanahan told the news source, adding that his business used to only export 10 percent of its product, but this number is now 70 percent. "I knew that the future of our company depended on a robust export effort."

This increased level of exports, according to McClatchy Newspapers, is only a piece of the good news for the sector. Although the number of firms who are bringing operations back – known as in-sourcing or re-shoring – is contested, there is sufficient evidence of the trend emerging.

"It's a hard number to quantify — the notion of out-sourcing and in-sourcing. There's a hype to both of those numbers," Chad Moutray, chief economist for the National Association of Manufacturers, told the news source. "We have a lot of foreign companies that are locating here. It's a global decision-making process right now."

China, the country that is the main manufacturing competition for the U.S., has seen rising wages and recent scandals hurt the image of its sector. According to SlashGear, Apple recently requested an "ethical manufacturing" check of its assembly suppliers in the Asian nation.

The Huffington Post reported that labor conditions in Asia, to which many Americans are now being exposed to following the Apple scandal, are not new and may eventually help companies in the U.S. A conversation is underway in the sector about whether to bring work back to the U.S., as the brutal working conditions and rising costs to produce overseas may provide sufficient motivation.