Economy

Our discourse on the manufacturing renaissance is marked by a failure to take hysteresis into account. First, I will select representative voices from the discourse. Then I will present a bracing article from IndustryWeek. I’ll conclude by merely alluding to remedies.

Things seem to be going very well for American manufacturing. Since 2009, 1.2 million manufacturing jobs have been created. The fracking industry has significantly lowered energy costs. Unemployment has reached a low of 3.8%, and 145,000 jobs were re-shored in 2018. We have had 10 years of growth since the Great Recession, and many articles in the past year suggest that the U.S. is in a manufacturing renaissance. But are we?

The economy is not just the stock market. A number of factors contribute to the overall health of the economy, and one of them is manufacturing. Although the jury is still out on whether a recession is coming for the broader economy, some people are concerned that a recession has arrived in the manufacturing sector.

The aging U.S. population and labor force weigh particularly heavy on one economic sector: manufacturing. While an aging population affects most sectors, its impact on manufacturing could be outsized for a couple of reasons.

If you are looking for signs of trouble in the U.S. economy, many experts and politicians point to manufacturing. The industry faces the double whammy of President Donald Trump’s trade war and declining purchases from abroad as Europe, China and other regions and countries slow down.

Europe’s battery manufacturing capacity is on the cusp of dramatic growth, though much of the investment and know-how are coming from Asian companies.

The Brookings Institution found that while 58% of respondents see manufacturing as vital to the U.S. economy, only 17% are confident in its future.

When geopolitical decisions, whether regulatory, tax or immigration, appear to be made arbitrarily, it’s going to cause pullback by business leaders. The current climate of tariffs, uncertainty and risk is a wake-up call for a slowdown.

Between 1990 and 2011, the U.S. manufacturing sector lost 1 of every 3 jobs. This scarring decline has left policymakers seeking explanations, as well as appropriate policy responses.

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