Here at the Marlin Steel facility in Baltimore, we’re always excited to see news about the manufacturing industry (after all, manufacturing is what we do). We’ve recently seen a lot of positive news that could indicate that the manufacturing industry in the USA is poised for a comeback.
“What are these pieces of positive news and why should I get excited for manufacturing,” you ask? Well, there are a great many reasons to be both optimistic and excited for the future of manufacturing, including:
Reason #1: Job Growth
For much of the last few decades, manufacturing was a declining business in America. After enjoying a boom in growth during the years following WWII, when America’s manufacturing infrastructure was one of the only undamaged sources of manufactured goods in the world, there was a major decline. During this time, there were innumerable factory lay-offs and closures.
Thankfully, this decline has leveled out during recent years. In fact, according to a recent Wall Street Journal article by James R. Hagerty, jobs in the manufacturing sector have risen “by about 600,000 over the past four years to more than 12 million.” In that same article, there was a bit of information from a survey that indicated that 21% of U.S.-based manufacturers “were moving production back to the U.S. or planning to do so.”
An increase in jobs in the manufacturing sector indicates that more business is coming to American manufacturers. More jobs also means more people paying taxes and contributing to the financial stability of the country.
Reason #2: Energy Costs are Going Down
As Marlin Steel’s owner discussed in a previous interview with WBAL radio’s John Patty, which can be found here, the discovery of new techniques to extract more natural gas from deposits in various areas of the country has made it cheaper and more economical to power the manufacturing industry.
In states such as Pennsylvania and Ohio, the natural gas industry has helped to boost tax revenues, providing more money for schools and other necessary civil services.
By making energy costs more affordable for manufacturers, it is more likely that manufacturing jobs will be brought to America than to other countries, further increasing job growth.
Reason #3: Overseas Labor Costs are on the Rise
One of the big issues behind the loss of manufacturing jobs in America was the costs attached to operating in the U.S. as opposed to basing manufacturing operations overseas. Not just the energy costs, which we discussed above, but the labor costs as well.
Overseas laborers often performed unskilled tasks for absolutely miniscule pay. For many manufacturing companies, the sheer cost savings that came with switching to using labor from underdeveloped countries was too tempting to pass up. In order to guarantee competitive prices, it was necessary to cut costs in every aspect of the production process, especially labor.
However, in recent years, the average labor costs for unskilled labor in other countries has been on the rise, negating many of the cost advantages of using overseas labor. Not only that, but some manufacturing tasks require specialized skill sets and education, which necessitates the hiring of more expensive skilled laborers anyways.
Reason #4: Robotics
The labor cost advantage for U.S. manufacturing is further compounded by the increase in workplace automation in factories. Robots can do many tasks much faster and with greater consistency than human labor, but still require the support of a trained and experienced engineer in order to function at peak capacity.
For example, a robotic wire bending machine being monitored by a single engineer can make hundreds of bends in a quarter-inch thick length of wire per minute. With this speed, the robotic arm can make hundreds of complete wire forms per hour, where a single worker who is very skilled and experienced might be lucky to finish more than ten or twelve pieces of thick wire in that same time frame. Even with this engineer earning far more money than a traditional worker, he or she can get far more work done in the same amount of time.
Not only that, but the precision with which automated manufacturing equipment can produce items means that they’re more well-suited for use in products that require miniscule error tolerances. This opens up the potential client list of a manufacturer, such as what Marlin Steel was able to do after adopting our own automated manufacturing systems.
Right now, the future of manufacturing in the U.S. is looking bright. Naturally, we cannot know what’s in store for the future, but we think that there’s more than enough cause to be optimistic.
To learn more about manufacturing, and how workplace automation can help bring about a renaissance of American manufacturing, check out our other blog posts, or contact us. Marlin Steel’s engineers are happy to help answer your questions.