How the Manufacturing Industry Has Rebounded from the Recession

How the Manufacturing Industry Has Rebounded from the Recession

Today, not only have are we seeing a rebound from the recession, but we’re finding that other countries and corporations are even investing in American Manufacturing.

The American Manufacturing industry has a long history as a part of the American DNA. The Industrial Revolution of the early 1800s brought iron and steam power to the forefront. In 1908, the first Model T Ford automobile rolled off the assembly line out of Detroit. Now, some of the most innovative technologies and robotics work side by side with American workers throughout thousands of cities across America.  

In 2008, the housing bubble collapsed, and markets tumbled. The “Great Recession” was born. Because the American economy is so tightly woven with the rest of the world, a shockwave was sent-out that staggered all markets. In the US, 20% of manufacturing output and 15% of the workforce took a hit. 

Today, not only have are we seeing a rebound from the recession, but we’re finding that other countries and corporations are even investing in American Manufacturing. In fact, manufacturing jobs have grown to 12.84 million workers. Something that hasn’t been done since 1949

In this article, we’ll explore a few of the top reasons why American manufacturing is back.  

Growth in the Economy 

After bailouts to large banks like AIG and Hathaway, America started to get back on its feet and look to the future. However, people’s savings and investment mentalities will forever be skeptical even when the next bubble isn’t right around the corner. But American business began to rise, and unemployment is currently at its lowest rate since 1962. And manufacturing has a lot to do with it.  

According to the Bureau of Economic Analysis, in 2018, manufacturing encompassed $2.33 trillion. This accumulated to 11.6 percent of U.S. economic output. Further, for every dollar spent in manufacturing, $1.89 is gained in business growth. As American manufacturing grows, so does the American economy.  

Moving Away from China 

One of the more interesting trends of the American manufacturing industry is the fact that manufacturing jobs are staying home. China has always been the go-to for manufacturer’s looking to save money, but that isn’t necessarily the case anymore. With rising wages in China, manufacturing has skyrocketed. The difference in China vs US goods on price is now only 5% cheaper to manufacture a product in China than the US.  

China also requires companies to pay workers up to one year after a plant closes. This is not the case in America. If you want to take a risk and try to build something new in America and it doesn’t work out, you can close and move on. This makes it more attractive for companies to try new things in America. 

Government Policies 

When deregulation occurs, manufacturing gets a boost. Even before the current administration took office, expectations of deregulation excited the industry. With less regulation, manufacturing companies can operate with more flexibility and place additional resources in areas for growth.  

The current tariff war is also playing a role in businesses staying and even coming to the US. To avoid further delays in producing, sending, and receiving a product, people are simply coming to the US to build. This creates a more efficient way for the product to reach the consumer, which ultimately saves time and increases profit.  

Looking Ahead to the Future 

With the economy up and manufacturing on the rise, American manufacturing is looking pretty strong. But one aspect of the market is lacking: labor. Paul Wellener, Vice Chairman of Deloitte, says, “Trade tensions lurk in the background and supply chains are straining to keep up with demand, while skilled talent is in short supply and threatening to derail the current industry momentum.” 

If you’re looking for manufacturing talent for your company, or you’re looking for a manufacturing position, Reliable Resources is here to help. Call us today.