What's Driving Manufacturing Growth?

Manufacturing is growing strongly in North America, with the majority of manufacturers expanding their production capacity and upgrading their facilities to cope with increasing demands. A number of factors are driving this manufacturing growth, including improvements in automation technology, government initiatives and the increasing availability of cheap energy.

A recent survey by ThomasNet, a company that connects buyers and suppliers, revealed that manufacturers in North America are feeling optimistic. The majority of manufacturers who took part in the survey claimed to be increasing their production capacities, upgrading their facilities and optimizing their existing operations. Manufacturers are also taking steps to expand their markets, with more than three quarters of those surveyed now selling overseas.

One of the factors that has been holding back U.S. manufacturing growth in recent years has been a lack of suitably skilled workers to meet the demands of the manufacturing industry. The Obama administration has taken action to address this shortage, allocating $100 million to fund apprenticeships that allow young people to gain the skills they need. President Obama also announced $300 million of funding for the development of new manufacturing technologies.

Automation is another possible solution to a lack of skilled workers to fuel the recent manufacturing growth. Although most manufacturers are not currently in a position to fully automate their production facilities, many are adding robots that perform particular tasks. When used in conjunction with skilled workers, robots can significantly speed up the production process, increasing the manufacturer's production capacity.

Automation can also reduce costs, which helps to drive manufacturing growth even further. One key reason why so much manufacturing moved overseas during the latter part of the twentieth century was that manufacturers wanted to reduce labor costs. Automation allows manufacturers to bring their production facilities back to their native shores, driving manufacturing growth in the United States and other developed countries.

Falling global oil prices are also reducing costs for manufacturers, although the effect is likely to be temporary. On the other hand, U.S. manufacturers could derive a more lasting benefit from hydraulic fracturing (fracking) in states such as Texas, where huge shale gas reserves have been found. As companies begin to exploit these rich natural reserves, the availability of cheaper fuel is increasing for U.S. manufacturers, which is another factor driving manufacturing growth across the nation.

The future looks bright for the manufacturing industry in the United States. Factory output and manufacturing jobs have both increased over the last few years. In order for the recent manufacturing growth to continue, manufacturers need to continue to invest in new technologies, such as automation for their factories and other production facilities, which can help to keep costs low while meeting the demand to increase production capacity.

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