Historically, the US has taken pride in being a manufacturing nation. It’s the 2nd largest manufacturer in the world and produces about 16% of the world’s goods. Even though the American economy is slowly shifting towards the tertiary sector (service-based economy), manufacturing remains an integral part of the country’s economic growth – employing almost 12.5 million people with a total economic output of 2.2 trillion USD.
The manufacturing sector took a big hit in 2008’s Great Depression, but statistics show that in the past decade the industry has been rapidly healing, ramping up production and creating new jobs.
Steady increase in spending
Market stabilization has contributed to a steady increase in consumer spending and attracting new capital. The increase in capital investments and production have also boosted the country’s economic growth. Several sectors are expected to grow in the next five years, besides the fact that the exceptionally strong USD is still stifling exports. The new sets of political and legislative measures taken by the government, are expected to further increase the production of goods and positively impact the sector.
Slow, tectonic changes
However, there have been slow changes encroaching upon the workforce engaged in manufacturing. The worker structure shifts – factories are no longer the places where men without a college or university degree can make their honest living by pounding slabs of metal into cars, tools or heavy machinery. Today’s assembly lines increasingly become quiet, orderly halls where giant robotic arms are doing men’s work under the watchful eye of highly skilled engineers.
In this era of highly advanced technology and rapid AI development, machines pose a great threat to millions upon millions of blue collar jobs. The staggering pace at which AI-powered robots are replacing only shows that we are entering a paradigm shift when we talk about manufacture. One study shows that about 60% of the entire manufacturing industry can be entirely automated in the next few years, prompting politicians to struggle with millions rightly worried workers.
Export-dependent industries are struggling
The strong dollar has caused a high increase in prices of US produced export goods such as machinery, electronics, electrical equipment, and chemicals, contributing to a decline in exports and sustained job loss.
However, this trend is expected to decline in the next few years – due to a shift in federal policies which regulate the sector, geared towards improving the climate for domestic manufacturers.
Economists forecast that according to recent trends, manufacturing is expected to grow at a relatively steady pace. There are several reasons for this trend – the main being increased productivity.
We find ourselves in a paradox. While blue collar jobs are threatened by the rapid development of AI – robots and 3d printers substantially increase rate and volume of production at reduced costs for maintenance.
The decline in gas prices and the growing production of domestic natural gas also give the economy a healthy boost – by providing agriculture and other industries dependent upon it with the cheap resource.
Another positive mark in manufactures projected growth, is the government’s increasingly protectionist stance when it comes to policymaking – especially in the areas of technology development. This creates a positive climate for capital spending in the homegrown industry. Furthermore, there has been a rise in consumer awareness when making purchasing decisions – a shift towards consuming homegrown products.