Manufacturing’s Optimistic Outlook Continues to Soar
As the nation’s economy reopens, the manufacturing sector will be a major player on the road to prosperity. Buckle up.
Posted: July 7, 2021
EDITOR’S FORUM
BY RACHEL DURAN
The thriving manufacturing economy is driving the nation’s economic engine, despite the challenges in the supply chain and labor shortages. Reshoring of manufacturing activities back to the United States in 2020 assisted the sector’s growth, a silver lining in the pandemic.
Everywhere you turn, reports and outlooks regarding the manufacturing economy paint an overall healthy picture. The Federal Reserve’s (The Fed) June edition of the Beige Book stated the U.S. economy expanded at a moderate pace from early April to late May. Several of The Fed’s districts credited the positive effects of increased vaccination rates and relaxed social distancing measures. The districts also reported the adverse impacts of supply chain disruptions. The Fed’s contacts are optimistic that economic growth will stay solid moving forward.
In another measure, according to the Reshoring Initiative’s 2020 Data Report, two milestones took place in 2020: reshoring and foreign direct investment job announcements to the United States were at a record high (160,649); and the cumulative jobs returned passed the 1 million (1,057,054) mark since tracking began in 2010. All this during a global pandemic. Due to the economic uncertainties around the world companies began emphasizing operations in their home countries. An additional boost are the recent national initiatives to shorten and close supply chain gaps for essential products.
The Reshoring Initiative’s team believes the return of manufacturing jobs will be a key to the continued economic and manufacturing recovery this year and beyond; the organization expects reshoring and FDI announcements to approach 200,000 jobs, up by at least 25 percent, in 2021.
In another indicator, issued by the Association of Equipment Manufacturers, the construction machinery market will grow 15.2 percent in 2021; with the agricultural machinery market expected to grow 15.8 percent in the same time period.
And, in yet another positive indicator, the Association for Manufacturing Technology reported that Q1 2021 machine tool orders totaled $1.14 billion, a 30 percent gain from Q1 2020. Leading the way were the agricultural, construction and mining industries.
Hiccups Exist but Positives Shine Through
While there are bumps on the road to economic recovery, a June 1 report from the Institute of Supply Management says the manufacturing economy expanded again in May, for the 12th consecutive month. According to the Manufacturing ISM Report on Business, which surveys U.S. supply executives, ISM’s Manufacturing PMI registered 61.2 percent in May, up from 60.7 percent in April.
The manufacturing economy performed well regarding demand, consumption and inputs, which registered strong growth compared to April’s figures.
The participants in the ISM report stated their companies and suppliers continue to struggle to meet increasing demands. Continuing to impact companies are the “record-long lead times, wide-spread shortages of critical basic materials, rising commodities prices and difficulties in transporting products,” stated Timothy R. Fiore, chair of the ISM survey committee. As the economy opens back up labor markets remain tight. Fiore notes that labor issues continue to limit manufacturing’s growth potential.
Overall, however, optimism abounds with the members of the ISM survey committee, where there were 36 positive comments for every cautious comment, compared to an 11-to-1 ratio in April. The six biggest manufacturing industries, which includes fabricated metal products, registered moderate to strong growth in May, according to the ISM report.
Fabtech 2021 is Back in Action
In-person industry trade shows are back! After more than a year away from hands-on and in-person events, fabricating and metalworking operators are excited to leave the shop and view the newest innovative products and witness live demonstrations of critical machinery. Fabtech 2021 will take place September 13-16 at McCormick Place in Chicago. Fabtech is North America’s largest metal forming, fabricating, welding and finishing event. In addition to the equipment exhibition portion of the event, attendees will also have opportunities to attend a comprehensive line up of educational sessions broken down by technology categories, at basic, intermediate and advanced levels of instruction.
While you are at Fabtech we invite you to stop by Booth A5170 and say “hello” to the F&M team. We look forward to seeing old friends and meeting new ones. Our new editorial team consists of editors Rachel Duran (rachel@fandmmag.com) and Joe Hazelton (joe@fandmmag.com). We look forward to learning about how your machine shop is succeeding, and the challenges you face, in the magical manufacturing economy.
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