Powering forward – Industrial manufacturing in the USA
It won’t come as a surprise to hear that American manufacturing took a hit during the Recession. However, following the economic recovery and a fortunate combination of various factors, US manufacturing is back up to its pre-crisis levels and the sector is set to continue growing – good news for engineers and technicians across the country.
Tipping the scales
A combination of factors has enabled this revival. US manufacturing costs are now almost as low as America’s main competitor in the sector, China. For many years, low labour costs drove China’s breakneck economic growth, at the expense of manufacturing jobs in the US, as American consumers revelled in the chance to buy cheaper products from abroad. However, China’s manufacturing costs are rising as wages increase and the country attempts to rebalance its economy into a more domestic consumption-driven economy, with higher value industries.
This increase in Chinese costs has coincided with a rise of productivity by American companies and a crash in energy prices. Dramatic decreases in the price of oil and gas has rapidly reduced manufacturing costs in energy intensive industries in America. US industrial electricity prices are now 30 to 50% lower than those of other major exporters.
The US doesn’t look to be losing this advantage soon either; it has approximately a 15 year lead on other nations when it comes to fracking, with 101,117 wells. China only has 258, and depends on overseas exporters to meet its oil and gas needs. By 2018, US manufacturing could be 2-3% cheaper than China. America also benefits from a home-grown engineering prowess that few other nations can match, and is home to many of the world’s leading technology and manufacturing companies and educational institutions – the Massachusetts Institute of Technology being a prime example.
Due to a combination of low energy prices, regulatory changes, expanding foreign investment and the use of new technologies, the number of manufacturing jobs has been growing in the American Mid-West – a traditionally industrial region. Between January 2014 and April 2015, Indiana added 19,700 manufacturing jobs, while Ohio added 22,600. These industries aren’t the old school smokestack industries traditionally associated with the Mid-West; they’re highly automated and packed with cutting edge technology.
Outside of the Mid-West, the American South-East is receiving plenty of investment in its auto sector, while in Michigan on the Canadian border, 26,900 manufacturing jobs were added. This recovery has even reached Motor City. The car industry in Detroit has finally begun to grow again – as have other industries in the city, providing a brighter future for its residents.
As industrial manufacturing powers forward in the US, there’s an ever increasing amount of opportunities for engineers and technicians. Are you looking for the next step in your career in the manufacturing sector? For jobs in the US and beyond, visit our jobs page.