The country’s heavy reliance on imported goods, specifically from China, has people thinking we aren’t making a whole lot of our own goods anymore. However, the Labor Department just released December’s numbers wrapping up 2011 and manufacturing saw over 20,000 new jobs. A pleasant, but not big surprise considering 2010 saw a similar increase. Looking at the big picture, this trend is uncharacteristic of the industry when you take into consideration that it hadn’t seen growth like this since 1997. Further research conducted by the Institute for Supply Management confirmed an employment index of 55.1 for this past month. Anything above 50 means companies are hiring more than they are laying off.
Despite the last two years of growth, if you look historically at manufacturing, employment is still down 40 percent at 11.8 million people. In 1979 there were 19.6 million people with jobs in manufacturing. However, that doesn’t mean the U.S. isn’t still a juggernaut in manufacturing goods, we’ve simply had to specialize in higher-value items (our labor costs are greatly higher than China’s). America’s value of manufactured exports for 2011 was approximately $1.074 trillion. That number ranked 3rd in the world behind the frontrunner China and just behind Germany. Machinery, chemicals and transportation equipment accumulate for half of our countries exports. Electronic products and computers are starting to see significant growth recently, but are still well below their pre-recession numbers.
The longevity of this recent rise in manufacturing is uncertain at this point. Ironically, in the wake of our own economic meltdown the success of our export industry right now lies in the health of foreign economies. Even though Europe now takes a smaller portion of our exports than they’re accustomed to, they are still one of the largest customers. If they fall into a recession, which many are predicting will take place there, the U.S. is going to be negatively affected.
Since President Obama took office in 2009, we’ve seen a 6 percent decline in manufacturing jobs. There appears no reason to believe he will be the first president since President Clinton to see an increase in manufacturing over a four-year term. However, you have to take the good with the bad these days. The Institute for Supply Management has indicated, “…a plurality of companies has believed business is getting better for 29 consecutive months.” While this news sounds quite bleak, the recent growth of the manufacturing industry is one of the very few reasons why our struggling-to-recover economy hasn’t fallen back into recession.
SOURCE: The New York Times