Manufacturing growth trends are up shown by indications from several leading business media outlets are that 2014 promises to be a strong year for the manufacturing sector of the U.S. economy. That’s great news for all manufacturers, including those who operate plants with automated assembly lines. Increased productivity and manufacturing gains set a bullish tone for 2014.
The December 2013 issue of Assembly magazine includes the publication’s Capital Spending Survey of assembly manufacturing companies. The survey cites data from the Institute for Supply Management indicating that economic activity in the manufacturing sector expanded in October for the fifth consecutive month and the overall economy grew for the 53rd consecutive month. The magazine reports an increase of 56.4 percent in October using the institute’s Purchasing Managers Index (PMI) data, an increase of 0.2 percentage point from 56.2 percent in September. Also, 14 of the 18 manufacturing industries represented in the index reported growth in October.
The institute’s data corroborates that reported by the federal government recently. According to the Commerce Department, orders for U.S. durable goods increased by the highest level in three months in September. Also, bookings for goods covering at least three years increased by 3.7 percent.
Finally, in great news for U.S. manufacturers, the magazine cited a recent study by the Boston Consulting Group indicating that reshoring is gaining momentum. Due to decreasing domestic energy prices, rising wages overseas and other factors, the United States could regain 2.5 million to 5 million jobs by 2020. More than half of executives at manufacturing companies with sales of more than $1 billion plan or might return some production from China to the United States. That’s up from 37 percent in February 2012. Also, the study indicates that the percentage (21) of respondents in the process of reshoring increased, compared with 10 percent in 2012.
Additionally, the magazine’s 18th annual Capital Equipment Spending Survey indicates that manufacturers will boost spending on assembly technology in 2014. U.S. assembly plants will spend $2.94 billion on new equipment in 2014, an increase of 3 percent from a $2.86 billion projection in 2013. Eighty percent of respondents will spend more or the same on assembly technology in 2014 vs. 2013 and only 20 percent say they will spend less.
The article notes that assembly manufacturers continue to invest in robotics. According to the Robotics Industries Association, robot shipments to North American customers through September broke the previous nine-month record set in 2012 by 14 percent in units and 9 percent in dollars. Assemblers reportedly will spend $103 million on robots next year, 18 percent more than in 2013 and the most in three years.
The Jan 2014 Wall Street Journal cites data from economic research firm IHS Global Insight indicating that equipment spending by U.S. manufacturing companies will increase by about 7 percent in 2014 to $211 billion. By comparison, that investment level grew by 3.5 percent in 2013. The newspaper adds that, despite many challenges that domestic manufacturers face—including skill shortages, deteriorating highways and bridges, and higher taxes than most major foreign rivals—wages are flat, while those in China are soaring. Also, U.S. energy costs have fallen, to the benefit of U.S. manufacturers, the newspaper points out.
According to the Jan. 2, 2014 edition of Bloomberg News, the U.S. manufacturing sector grew in December at the second-fastest pace in more than two years and saw a gain in orders. According to factory purchasing managers, orders were the strongest since April 2010 thanks to recovering foreign economies, an increase in business investment and greater demand for building materials.
The publication cited Institute for Supply Management data indicating that, beginning in June 2013, confidence is growing among factory purchasing managers and promises to spur durable goods demand. Another positive sign is Commerce Department data released on Dec. 24, 2013 showing that orders for non-military capital equipment climbed in November by the most in 10 months. That figure is a reliable indicator of future business investment in long-lasting goods such as computers and machinery.