Economy

Kelsi Maree Borland writes that e-commerce has become the principal, or at least the most fervent, driver of industrial activity in the United States and particularly in Southern California, which is home to some of the country’s tightest industrial markets. While e-commerce dominates U.S. industrial activity, manufacturing activity is still booming—south of the border. Mexico has picked up much of the industrial manufacturing business, and as a result the north Baja industrial region is seeing record-breaking stats.

China’s capital, Beijing, will shut about 1,000 manufacturing firms by 2020 as part of a program aimed at curbing smog and boosting income in neighboring regions, state media said. Beijing will focus on dynamic, high-tech industries and withdraw from “ordinary” manufacturing, reported the People’s Daily, a Chinese Communist Party newspaper, citing a recent policy document published by the Beijing municipal government.

Terry Iverson, a machine tool industry veteran, is on a quest to change the perception of the American manufacturing workforce landscape. The manufacturing floor is not what it once was. Computerized, clean and automated cells have emerged in the market and need an entirely new level of shop expertise.

U.S. manufacturing is not in decline but alive and well, producing record levels of output in recent quarters despite significant price deflation for manufactured goods. No other sector of the U.S. economy delivers greater value to American consumers than manufacturing when it comes to providing more and more output at prices that have declined annually by 2.64 percent in real inflation-adjusted terms over the past quarter century.

The Republican Party has become the party of blue-collar America. After the 1992 election, 15 of the 20 most manufacturing-intensive congressional districts in the U.S. were represented by Democrats. Today, all 20 are held by Republicans. The shift of manufacturing from a Democratic stronghold to a Republican one is a major force remaking the two parties. It helps explain Donald Trump’s political success, the rise of Republican protectionism and the nation’s polarized politics. It will help shape this year’s midterm elections.

With the new norm of global uncertainty, suppliers and customers alike must retool their thinking and business models to mitigate risk—be it political, economic, social or climatic. The urgency created by the current political climate is accelerating the technology development already underway. Companies caught in the crosshairs of a trade war will lose ground to those that strategically invest in developing an agile supply chain.

A.T. Kearney published its fourth annual study on reshoring. The new release shows record imports in 2017 from traditional offshoring countries.

A blade and knife manufacturer for the lumber industry suggested that it might have to close its plant in Michigan. The largest nail producer in the U.S. has laid off 60 workers and warns that it may be forced to move its factory to Mexico. A California cannery said its profit margins could drop by up to 70 percent over the coming months. A well-known motorcycle manufacturer said it’s shifting some of its production to foreign countries. What is this financial crisis that’s affecting so many manufacturing companies? In each case, the Trump administration’s tariffs on steel and aluminum are said to be the culprit.

To move forward, it is important to see how American manufacturing compares with that of other nations. This report develops a global manufacturing scorecard that looks at five dimensions of the manufacturing environment: overall policies and regulations; tax policy; energy, transportation and health costs; workforce quality; and infrastructure and innovation.