Industry Trends & Analysis

Advanced economies always lean toward services as they grow. But there are many other advanced economies out there with more robust factory sectors than the United States, employing much larger shares of their workforces and spinning off much more productive research and development. Let's not give up without a fight, which in this context means the application of smart policy at every level of government.

Looking back, two kinds of people lived in the United States in 2016: those who believed Donald Trump and those who believed data. But all was not as it seemed.

March U.S. cutting tool consumption totaled $207.08 million, according to the United States Cutting Tool Institute, Cleveland, and The Association for Manufacturing Technology, McLean, Va. This total, as reported by companies participating in the Cutting Tool Market Report collaboration, was up 8.8 percent from February's $190.32 million and up 3.5 percent when compared with the $200.05 million reported for March 2017. With a year-to-date total of $581.02 million, 2018 is up 6 percent when compared with 2017.

The Institute for Supply Management reported that the April Purchasing Managers' Index registered 57.3 percent, a decrease of 2 percentage points from the March reading of 59.3 percent.

Manufacturing, which shed nearly a third of its workforce between 2000 and 2010, is rebounding as a solid path to the middle class. The industry has taken a more tech-intensive twist, making skills like practice in 3D design critical for future employment. Schools are taking notice.

One benefit of expanding manufacturing employment is that workers are paid a premium. However, there is less of a pay advantage in manufacturing than there used to be. This suggests that policies to expand manufacturing employment should be accompanied by policies that maintain or strengthen compensation standards.

February U.S. cutting tool consumption totaled $190.12 million, according to the U.S. Cutting Tool Institute and the Association for Manufacturing Technology. This total, as reported by companies participating in the Cutting Tool Market Report collaboration, was up 3.5 percent from January's $183.61 million and 8.7 percent when compared with the $174.98 million reported for February 2017. With a year-to-date total of $373.73 million, 2018 is up 7.4 percent when compared with 2017.

The United States Cutting Tool Institute (USCTI) reported total billings of nearly $168 million among the 43 cutting tool companies included in USCTI's Current Business Report (CBR) for February 2018. The total represents an increase of almost 7 percent over total billings in February 2017, which topped $156 million, and a 6 percent jump compared to total billings of nearly $157 million in February 2016.

U.S. manufacturers face an aging workforce, concerns regarding safety best practices, ongoing movement toward lean manufacturing and the rapid emergence of new technologies. At the same time, people are struggling to pay bills, find work that provides a living wage, and support themselves and their families.

Optimism among U.S. manufacturers is growing as the nation adopts policies that prioritize them, according to an industry advocacy group. The latest tax changes have "transformed the business climate," said Jay Timmons, CEO of the National Association of Manufacturers. "Manufacturing in America is a confident industry."

As the factories for U.S. manufacturers are increasingly becoming digitized and connected, the surface for cyberattacks is broadening. To allow experimentation on cybersecurity technology for the factory floor, the Digital Manufacturing and Design Innovation Institute, Chicago, officially launched its "Cyber Hub for Manufacturing" earlier this month. DMDII reported that the U.S. Department of Defense contributed $750,000 in seed funding for the hub.

There's a Sands Casino where the Bethlehem Steel Corp. once stood. The casino was completed in 2009, just 8 years after the 100-year-old steel company filed bankruptcy. Ironically, the biggest obstacle facing the casino's developer was a shortage of structural steel. Even more ironically, the developer ended up buying it from Nucor Corp., the onetime "minimill" competitor that Bethlehem executives scoffed at decades earlier for the startup's embrace of electric arc furnace technology.