The pandemic has brought hope to Elkhart, Indiana.
Demand surged as families took the highways and shunned hotels in the city, which is known as a hub for RV production. A cluster of manufacturers enjoyed record profits, and workers benefited. Unemployment rate in metropolitan area In the second half of 2021, it will drop to 1%, and the average weekly wage will be jumped 35 percent From early 2020 levels.
But that frenzy turned into chills. Dealers who used to hoard as many trailers and vans as they could are discounting them to clear inventory, and new orders are drying up. The region has lost nearly 7,000 manufacturing jobs in the past year, and the unemployment rate is now above the national average. With an extensive portfolio of RV brands, Thor Industries Sales decreased by 39.4% From the quarter a year ago.
Chris Stager, Chief Executive Officer of the Elkhart County Economic Development Authority, said: He foresees new projects driven by the recent Federal Energy and Infrastructure Act, but at the cost of rising interest rates in the meantime.
“It’s not bad, but it’s not what it used to be,” Stager said.
That’s 2023 American manufacturing.
factory construction progress faster This indicates that domestic production could be revived by breaking away from long and fragile supply chains and injecting billions of dollars of public investment.
At the same time, manufacturing is suffering from a hangover of sorts as retailers run out of inflated inventories after a tremendous economic boom fueled by withdrawn consumers. Efforts to fight inflation by the Federal Reserve, which is expected to announce another rate hike on Wednesday, have tempered big purchases.New orders are decreased from last summer, And a widely-tracked measure of purchasing activity was bearish. 6 months.
Manufacturing jobs rebounded quickly after the pandemic, which is unusual in a recession. Made a contract 2 months.Industry layoffs remain low, but job openings and hiring down from recent highs.
Scott Paul, president of the Alliance for American Manufacturing, said, “It’s not one of those really worrying plummets that’s slashing manufacturing jobs, but it seems to be stalling.” said. “And I think the longer it goes on, the harder it will be to make things better.”
A bigger question for the U.S. economy is whether this portends a broader recession, as weaker demand for goods usually means that consumers are feeling financially strained. “Manufacturing is always at the forefront of recessions,” said Barbara Denham, senior economist at Oxford Economics.
To understand the current recession, it is important to analyze the manufacturing moment America is emerging.
Example: These new manufacturing jobs weren’t just for people making steel coils and oak cabinets. The manufacturing of consumables such as food, beverages and pharmaceuticals will account for a very large share of job growth from 2020 to 2022. However, they tend to pay less, require less training, and have fewer unions than heavy industries such as aircraft and automobiles. And that could disappear sooner as demand returns to normal.
The pandemic-era manufacturing boom hasn’t been the same everywhere, either.states like Nevada, Arizona, florida and texas Soaring well above pre-pandemic baselines, but long-standing manufacturing centers — Michigan, Illinois, new york and Ohio — not fully recovered. This imbalance reflects recent trends in migration, as people moved from urban areas in search of more space, more sunlight and a lower cost of living.
Ongoing factory construction poised to further reshape America’s manufacturing geography with largest increase in investment happening in mountain west.
All new buildings are driven by several factors. Former President Donald J. Trump’s trade wars raised the cost of imports from China and other countries, while the pandemic disrupted ports, crippled suppliers and relied on far-flung procurement networks for manufacturing. It hit the business.
In recent months the war in Ukraine – the US has responded 36 billion dollar arsenal — creating longer-term contracts with defense manufacturers, most of which are limited to domestic production.
Steve Macias, co-owner of a small machine shop in Phoenix, said orders from the semiconductor industry are slowing as demand for consumer electronics rises.But in recent weeks, he’s been busy servicing military customers — as the Pentagon returns planes and ships to combat status and restocks. Empty storehouse of munitions.
“We had a lot of deferred maintenance,” Macias said. “So this kind of catch-up and the outbreak of this war that no one really expected.”
Finally, three major bills (the Infrastructure Investment and Jobs Act, the bipartisan Infrastructure Act, the CHIPS and the Science Act) have been passed in the last two years, covering semiconductors, solar panels, wind turbines and bridges. Private funders are scrambling to seize this opportunity, although many are still in the planning stages.
Adam Ozimek, chief economist at the Economic Innovation Group, an entrepreneurship-focused think tank, said, “Many manufacturers are reacting to the many long-term structural factors they see in their industries. there are,” he said. “They see increased demand for domestic production in the long term. It is a bet on the future.
But even if it does, the investment may not create as many jobs as factories of comparable output have in the past.
Newly built production lines tend to be more automated and efficient than those designed in the 1950s and 60s. And because it is difficult to attract and retain enough skilled workers to replace retirees, some companies are installing robots in their factories.of average age of manufacturing workers are two years older than the national median.
“These facilities are desperate for workers,” said Mark Farris, CEO of the Greenville Regional Development Corporation in Greenville, South Carolina. Think robotics, 3D printing. This is a technology investment that will replace the workers we cannot find. “
For companies that rely on fossil fuel-related industries, increased federal investment may be enough to survive as demand shifts to clean energy.
LaDon Byars runs Colonial Diversified Polymer Products, which employs approximately 75 people in western Tennessee. The company has survived many cycles of outsourcing and offshoring, manufacturing molded rubber products such as gaskets and mats for various customers. Automakers are important customers, and Byars knows that demand for components in vehicles with internal combustion engines will begin to decline.
However, she is encouraged by the many solicitations she has received as a result of regulations requiring parts and raw materials to be found in the United States rather than abroad for federally funded projects. She believes that, like building new roads, strengthening domestic supply chains will pay off in the end.
“It takes a while for them to cross the intersection. It’s chaotic and blocked,” Byars said. “And when they finally open it, everything works much smoother and better and there are no long delays. No, but I think it’s in the long-term best interest of the American people.”
