April 11, 2013

U.S. manufacturing set for a comeback, says analyst

Charles Oliver

— The United States has begun to see a resurgence in manufacturing as companies bring operations back from overseas, says Gardner Carrick, vice president of strategic initiatives at the Manufacturing Institute, a think tank affiliated with the National Association of Manufacturers.

“It began as a trickle and turned into a stream. Now, it’s a pretty solid flow,” Carrick said Wednesday at the Dalton Golf & Country Club during the Manufacturing Trends Luncheon sponsored by Dalton State College and the Greater Dalton Chamber of Commerce.

“The No. 1 reason is the energy boom. Cheap, abundant and reliable sources of energy are a major attraction,” he said.

Advances in hydraulic fracturing, or fracking, have allowed energy companies to tap into natural gas and oil trapped in shale, leading to dramatic increases in production and falling prices for natural gas.

Carrick said manufacturers are also finding that relying on contract production in places such as China carries risks.

“Those operations may be less flexible, and the Chinese do not respect intellectual property law to the same degree that the United States does,” he said.

Carrick said a survey found that 50 percent of American companies may be looking at bringing some operations back to the United States. That could create some 600,000 jobs.

“But the jobs they will be bringing back aren’t the same ones they sent overseas,” he said.

Carrick said there’s increasingly little place for low-skilled or no-skilled workers in manufacturing, even at the entry level. Those jobs demand more and more skills, and he said that’s one of the two things that could limit the resurgence in American manufacturing.

Carrick said that over half of manufacturing employers report they cannot fill positions because they cannot find people with the skills they need. He said the National Association of Manufacturers is working with companies and educators to develop programs to train workers and future workers, but the process will take time.

Carrick said U.S. tax policy also hinders the growth of manufacturing. He noted that all of America’s nine largest trading partners have cut their corporate tax rates since 1997. The United States has not.