Friday, December 16, 2011

Heavy Metal, Made in the USA Is Coming Back

From the article by Joel Kotkin "Heavy Metal Is Back: The Best Cities For Industrial Manufacturing," in New Geography:

"For a generation American manufacturing has been widely seen as a “declining sport.” Yet its demise has been largely overplayed. Despite the many jobs this sector has lost in the past generation, manufacturing remains remarkably resilient, with a global market share similar to that of the 1970s.

More recently, the U.S. industrial base has been on a powerful upswing, with employment climbing steadily since 2009. Boosted by productivity gains and higher costs in competitors, including China, U.S. manufacturing exports have grown at their fastest rate since the late 1980s. In 2011 American manufacturing continued to expand, while Germany, Japan and Brazil all weakened in this vital sector.

This shift towards domestic energy augurs well for a huge and economically beneficial shift in America’s longer term economic prospects. Cheap natural gas, for example, makes petrochemical production in America more competitive than anyone could have imagined a decade ago. Linkages with Mexico in terms of energy as well as autos has made Texas the nation’s primary export super-power, with current shipment 15% to 20% above pre-crisis levels.

Already the boom in natural gas has sparked a considerable industrial rebound in parts of eastern Ohio including the building of a new $650 million steel plant for gas pipes in the Youngstown area. Karen Wright, whose Ariel Corporation sells compressors used in gas plants, has added more than 300 positions in the past two years. “There’s a huge amount of drilling throughout the Midwest,” Wright says. “This is a game changer.”

But the industrial rebound is not only about energy. Another critical factor is rising wages in East Asia, including China. Increasingly, American-based manufacturing is in a favored position as a lower-cost producer. Concerns over “knock offs” and lack of patent protection in China may also spark a growing “Made in the USA” trend."

HT: Steve Bartin

9 Comments:

At 12/16/2011 11:49 AM, Blogger Benjamin said...

Yeah, I can remember when Kotkin said heavy manufacturing didn't matter anymore. He liked software companies.

With a relatively low exchange rate for the dollar, and rising costs globally, the USA may have a fighting chance going forward.

Let's hope the Fed doesn't cave in to the idiotic braying for a "strong dollar."

 
At 12/16/2011 2:08 PM, Blogger Buddy R Pacifico said...

Property rights protections and epic declines in natural gas prices ceratainly are favaroable for a return to American "Heavy Metal".

Another factor are pensions, other benefits and union dues in China.

Foreign workers must now pay 40% of their wages toward pensions and other welfare. These are benefits that may never be received.

Companies must also pay union dues for their non-union employees!

 
At 12/16/2011 2:17 PM, Blogger sethstorm said...

30 years too late and many jobs too short for Youngstown.

 
At 12/16/2011 6:03 PM, Blogger PeakTrader said...

The end of the free ride of cheap imports won't benefit the U.S..

Americans need to invent more products and produce more high-end goods.

Not go backwards.

And China will continue hacking into foreign firms.

Americans working for something they didn't have to before is not a benefit, although it may be inevitable.

 
At 12/16/2011 6:53 PM, Blogger Marko said...

I can just hear unions licking their chops - we need to make sure they don't screw things up again this time and drive these jobs back overseas!

 
At 12/16/2011 11:04 PM, Blogger randian said...

Apple's A5 processor is now produced entirely in the US (Austin, TX).

 
At 12/17/2011 11:18 PM, Blogger sethstorm said...


Marko said:
I can just hear unions licking their chops - we need to make sure they don't screw things up again this time and drive these jobs back overseas!

Given the abuse of offshoring by business, the US should be prohibiting such an offshore move. That is, lock these jobs in the US, especially in hard-hit places like Ohio.

Businesses have caused more damage across more people than any labor union has ever done. To that end, unionbusting is more suited to be a felony for its intimidation and fear of disclosure of unionbusting to the public.


The only thing offshoring proves is that business hates freedom, since it gets in the way of making money. From the South's slaves to the Third World, US businesses show a preference for thralldom in the workplace.

 
At 12/19/2011 1:50 PM, Blogger juandos said...

"Linkages with Mexico in terms of energy as well as autos has made Texas the nation’s primary export super-power, with current shipment 15% to 20% above pre-crisis levels"...

That struck a chord and I saw this this morning at the Atlantic site: Texas Cities Won the Recession, and They're Winning the Recovery

Pull quote: 'Last week, two reports again put Texas cities at the top of a national survey. Houston, Dallas, and McAllen were named among the 20 top-performing large U.S. metros, according to a survey out of the Brookings Institution that measures housing prices, employment and economic growth'...

 
At 12/20/2011 4:33 PM, Blogger Ian Random said...

Offshoring is the only way for businesses to vote, look at the top 10 contributors to campaigns. Remember a union goes in and you can't fire the slackers and reward the performers, because they become one giant block. When unionization was talked about at my place of work, the worst worker was the most vocal. No business wants to move offshore, but if it doesn't pencil in they have to.

 

Post a Comment

Links to this post:

Create a Link

<< Home