Manufacturing Revival Sees Regional Discrepancies
Concerns about a decline in U.S. manufacturing might be overstated, given that the industry still boasts a quarter-million factories employing 13 million workers and contributing over 10% to GDP. However, the Federal Reserve’s Beige Book highlights significant regional disparities.
Manufacturing activity is experiencing varied trends: a downturn in the upper Midwest, stability in Texas, and an upswing in the Northeast.In the Northeast, Queen Screw in Waltham, Massachusetts, is benefiting from increased orders, particularly in the medical and defense sectors.
General Manager Peter G. Babigian reports a 5-10% rise in orders, attributing this to a post-pandemic adjustment by customers. “During COVID, people ramped up and oversupplied,” Babigian said. “People have now depleted some of that inventory, so we’re picked up a little bit.”
Regional dynamics contribute to these differences. Jason Miller, a supply chain management professor at Michigan State University, notes, “The Northeast isn’t a general manufacturing powerhouse, but areas like Boston and New York have a strong pharmaceutical sector.”
Meanwhile, other regions, such as North Carolina and Michigan, face challenges in sectors like furniture due to a downturn in housing. Economist Betsey Stevenson from the University of Michigan emphasizes, “We often forget how big the United States is. We see really big differences in the economic situation across the country.”
The pandemic-driven shift in consumer spending from services to goods initially boosted manufacturers, but as spending returned to services, the impact varied widely by sector.
Despite regional successes, the industry faces overarching challenges, including labor shortages and regulatory uncertainty. Carolyn Lee, president of the Manufacturing Institute, highlights, “One of the biggest challenges is uncertainty in regulation and policy. All of that has a chilling effect.” With over half a million unfilled manufacturing jobs, the industry grapples with a structural skills gap, affecting manufacturers nationwide.
Source: Marketplace.org