Is American Manufacturing Back?

Manufacturing sees its first employment gain in 13 years

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The long-tortured manufacturing industry recently turned a corner of sorts: According to the Wall Street Journal, after 13 years of non-stop job losses, the sector has finally managed to create more jobs than its lost. But does this mean Americans are going back to their blue-collar roots? Here's what we know:

  • Economists Expect the Upswing to Continue  According to the Journal's James Hagerty, projections are that 330,000 additional manufacturing employees will start punching the clock this year alone. Although a far cry from the “nearly six million” jobs the sector has lost since 1997, the Journal says it’s a start, particularly because projections are that “manufacturing should be at least a modest contributor to total U.S. employment in the next couple of years.”
  • Companies Are Thinking Local  Tax incentives are encouraging employers to stay put and take root, going so far as to encourage Michigan-based Whirlpool Corp. to build its first domestic plant since the 1990s. All it needed, Hagerty explains, was a little encouragement:
It already had a trained work force there and wouldn't need to pay severance costs. Freight costs would be lower since most of the plant's products are sold in the U.S. And state and local governments were willing to kick in about $30 million of incentives—including grants and property tax breaks.”
  • Caution Is Critical  Despite the temptation to be giddy that some sort of economic indicator is going in the right direction, the Federal Reserve is keeping the hazard lights flashing, according to a recent Fed Beige Book report. The reason: only half of the Reserve’s 12 districts have completely positive results, and some, like St. Louis have nothing but bad news, reporting “a continued decline in activity, persistent weakness in employment and plant closings.”
  • Not Everyone Is on Board  The Federal Reserve, in the same report, says money is tight, and not everyone is willing or able to go all-out blue collar.
Only Boston and Philadelphia reported that firms were planning to increase capital spending in the current year. Cleveland, Chicago and Kansas City reported expectations of continued modest spending.
  • Manufacturers Aren’t Buying It  Betraying a gloom not exposed in the Fed’s Beige Book report, the National Association of Manufacturers says yeah, there’s been an uptick--but in “Just three of the 19 major manufacturing industries,” leaving everything that falls outside computer and electronics, petroleum and coal and food and beverage industries in the dust. Further detracting from the triumph of the top three--not only did they dial back production by a mere 7 percent during the recession, but they represented less than a third of overall output.
  • You Want Pain, Look Here  According to the National Association of Manufacturers, a true turnaround would mean reviving the heavy lifters--like plastics, aerospace, which "are roughly half of the way back to their level of production," after seeing their output tank 28 percent in 2007, or any field connected to housing, such as wood products and textile products, "where the recovery to date has been historically sluggish."
This article is from the archive of our partner The Wire.