Rebuilding the American Foundation- Part 1

Posted: 11th December 2013 by brednane1981 in Super Tool
Tags: , ,

Much discussion has been afforded on the notion of re-shoring; the returning home of outsourced production. And while all the talk speaks the truth, that America is starting to celebrate its homecoming of jobs, let’s not forget what is at stake. Manufacturing is all too often shunned of the spotlight that it really deserves. People, a middle class people, working hard to produce goods and provide services for the rest of world to use, while at the same time buying goods and earning a decent living wage to support their family. Manufacturing is the WD-40 to the economic wheel. This is a time to come together, get back to work, and help get the wheel turning again. Part 1 of this 3 part series will present a little background on what’s happening at home, part 2 will look at what’s happening overseas (selected areas) and part 3 will try to draw some conclusions.

What’s Happening in America…

As American factories continue to produce high quality durable goods, demand for American products is going up. Over the past year, American manufacturing has continuously seen a rise in production. As the country continues to move out of recession, manufacturing of machine tools and equipment are soaring higher than ever and are projected to continue rising well into 2014. Factory capacity is filling up in machine shops all over the country, reaching about 77 percent according to an article in Modern Machine Shop. This is good news for everyone. As the recession passes, demand for goods goes up, production goes up, jobs are created, and people go back to work. As people work,  money goes in their pockets,  they begin to spend more, and the economic wheel begins to turn. At the same time, other countries will increase their buying of American products and place new orders.

For 2013, the big increase was in the purchasing of real capital goods, i.e. equipment and machinery, and is continuing to climb. Modern Machine Shop reported that “according to the 2014 Metalworking Capital Spending Survey by Gardner Research, U.S. metalworking facilities will spend $7.442 billion, an increase of almost 19% over 2013, on new metalcutting equipment next year.”  For machine tools specifically, factories purchasing more capital goods is a great sign because if the manufacturers of end products (planes, trains, and automobiles, and die and mold plants to name a few) are increasing their capacity for work, then they will be ordering more tools, which increases the shop load of tool manufacturers.

Re-shoring is another sign of things to come. As work that was once sent out of the country begins to be brought home, businesses have a need to hire more workers. This is good all around for individuals, for the business, and for the economy as a whole.  Not everything that was outsourced will be brought home. Some operations that were at first sent to perhaps China may still be outsourced only to India, Taiwan, or Vietnam. That is to be expected. What’s important is taking those jobs that are coming home and embracing them to keep them here.

Increase in production orders and re-shoring has forced business leaders to be creative and find a way around a big problem that has been staring them in the face: the need for more skilled laborers. To help solve this problem, manufacturers have turned to automation machines. By using more automated machines, businesses can increase their productivity while maintaining a smaller labor force.

This is a crucial time for the country to reset itself and fix the crack in the foundation that has thrown everyone off balance. The strength of manufacturing in the U.S. is steering the country back to economic growth. All the tools are right there to get everything back on track and start paving the way for a brighter future. Check back this Friday (12/13/2013) for part 2 of this 3 part discussion.

Chadd Brown
Super Tool, Inc. 

 

The following link is to the Modern Machine Shop article mentioned above:
http://www.mmsonline.com/articles/american-manufacturing-on-the-rise

Click Here for Part 2…
http://blog.supertoolinc.com/2013/12/13/rebuilding-the-american-foundation-part-2/

 

Share