What’s in Store for U.S. Manufacturing: An Economic Forecast
Since the beginning of this great recession in America, there has been a lot of talk about the decline in the manufacturing market sector. Over the last 30 years, millions of manufacturing jobs have left America, exported to other nations. But when doing an economic forecast, one needs to look forward in a market sector to see what lies ahead. When calculating my economic forecast, there is the strong possibility that the U.S. manufacturing market sector may have a rebirth over the next decade.
There are several key inputs when making an economic forecast for manufacturing. You have labor costs, energy costs, transportation costs and the quality of workmanship. These are some of the main ingredients when calculating an economic forecast in the manufacturing market sector. I would argue that the U.S. can really gain an edge in many of these areas within the next decade.
The most common perception is that the manufacturing market sector will never come back to the U.S. That condition is changing due to several key shifts. Recently, the U.S. manufacturing market sector has seen a slight resurgence in new facilities being built and more workers being added; however, wages are significantly lower than they used to be. We’re now looking at situations where a factory such as American Axle & Manufacturing Holdings, Inc. (NYSE/AXL) is offering $10.00 an hour for new hires, as opposed to $18.00 an hour for existing workers hired before 2008.