Skip to main content

U.S. Manufacturing on Track to Lead the World

The past several months have been filled with numerous gloom and doom stories on U.S. manufacturing. But, are they really accurate? Reports have shown some slower manufacturing numbers over the past few months, and media outlets have heavily broadcasted these trends. Still, there is more to this story. Sometimes it’s easier to stick with the “popular” theme even if it means skimping on some important details.

U.S Manufacturing: The Big Picture


The rest of the U.S. manufacturing story holds a theme of excitement and promise. In our most recent edition of the GrayWay, Hal Sirkin, Senior Partner and Managing Director at the Boston Consulting Group, points out that, according to the Reshoring Institute, there is currently more reshoring happening than there is offshoring.


As manufacturers are bringing their operations back to U.S. soil, new industrial investment is being made as well with several geographic regions quickly becoming manufacturing hotspots. U.S. energy abundance, increasing wages in China, U.S. stability, and the need to be near consumers, among other reasons are all driving new manufacturing investment in addition to the reshoring movement.


Here at Gray, we’re seeing these developments first hand. Nearly 80 percent of all our projects are in the manufacturing market. This trend has remained consistent over the past five years, and there is no indication of it waning.


Manufacturing growth feeds the U.S. economy and results in an overall stronger United States of America on a global scale. In fact, the 2016 Global Manufacturing Competitiveness Index projects the U.S. to surpass China as the most competitive ranking nation by 2020. Yes, you read that correctly. In this perspective, the story of a few months of “slowing” manufacturing seems much smaller.


U.S. Manufacturing vs. China Manufacturing


As the reality of this research sinks in, we need to consider a couple of areas:


  1. How is the trend happening?
  2. What is the impact of it on the U.S.?


According to Deloitte and the U.S. Council on Competitiveness, the transition of power from China to the U.S. is credited to many factors, but the top three competitive metrics include talent, cost competitiveness and workforce productivity.


Source: Deloitte and US Council on Competitiveness, 2016 Global Manufacturing Competitiveness Index
Source: Deloitte and US Council on Competitiveness, 2016 Global Manufacturing Competitiveness Index


If you think about how each nation measures up against these areas, the projection from earlier is not that surprising. In the past decade and especially in the past five years, the U.S. has focused on closing the skills gap in talent, emphasizing STEM education, and enforcing lean and efficient practices largely through the use of innovative technology all while keeping cost concerns top of mind.


China, on the other hand, has experienced challenges with a continually slowing economy coupled with increasing wages and other costs, value chains becoming more complex, and more demanding and sophisticated consumers. The volatility of the global economy has also had a greater bearing on China.


While these developments present an enormous opportunity for the U.S., they also pose ongoing challenges. Manufacturing competitiveness is not based on the single roles jobs, productivity, trade, wages, and countless other factors play. It is, instead, defined in how these factors work together to impact the economy.


In other words, the U.S. has to continue to invest in forward-thinking developments to prepare for the future. Every American and American-based company has a role to play in keeping the momentum of manufacturing competitiveness strong. Let’s strive to fulfill these roles and continue to build a robust American manufacturing sector that leads the world.

    Some opinions expressed in this article may be those of a contributing author and not necessarily Gray.

    Get the Latest.