U.S. manufacturing up, still needs help

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It was a good year for U.S. manufacturing, at least compared to 2010.

The most current U.S. manufacturing technology orders put the year-to-date total at $463.32 million, which is up 80.5 percent compared with 2010 and the second highest dollar amount in the last 15 years.

It’s a good sign for all of manufacturing, said Douglas K. Woods, president of the Association for Manufacturing Technology.

“It’s long been recognized that analysis of manufacturing technology orders provides a reliable leading economic indicator, as it is an indicator that manufacturing firms are investing in capital equipment to increase their capacity and improve productivity,” he said. “Manufacturing technology provides a foundation for all other manufacturing.”

Machines and devices are the equipment that turns raw materials such as steel, iron, plastic, ceramics, composites and alloys from their original state as stock materials into durable goods such as airplanes, cars and appliances, he said.

In Colorado, non-durable goods producers reported growth while durable goods manufacturers detailed pullbacks in November, said Ernie Goss, director of the Denver-based Goss Institute for Economic Research.

Both manufacturers and non-manufacturers in the Colorado continue to depend more heavily on expanding the average length of the work week rather than increasing employment.

Beyond manufacturing technology, overall U.S. manufacturing is robust.  Despite the past several years trend of off shoring, the value of U.S. manufacturing output increased by one-third to $1.65 trillion between 1972 and the 2008 recession, Woods said.  China accounted for 19.8 percent of global manufacturing value in 2010 and the U.S. was strong with a share of 19.4 percent.

“The factors that are fueling this tremendous surge are the traditional reasons that drive growth in investment, but what is unusual about the current rebound is that all factors have come together at one time,” Woods said. “This is something that’s never been seen before and as a result we are seeing a true renaissance for manufacturing in the U.S.”

American manufacturers rushed to beat the end-of-year bonus depreciation deadline.  Inventories were low – something the U.S. never experienced going into a recession – and that accounts for the quick rebound, Woods said.

“This all said, manufacturing in America still needs help,” Woods said. “Jobs are an unresolved issue.  Despite the high number of Americans out of work, manufacturing jobs continue to go unfilled.”

The factory floor today is very different from what it used to be and that means the workforce must be trained to use the new technologies and processes, Woods said.

“We need a “smartforce” of workers who are up to the job,” he said.