The Coming U.S. manufacturing boom
For more than two decades, Americans have watched with varying degrees of dismay as the manufacturing sector of the U.S. economy – once our backbone and a source of enormous national pride – seemed destined to wither and die. Many domestic manufacturers went up market in search of high value products that required considerable expertise and skill that was less likely to be uncompetitive on labor costs alone. But for many in the businesses of making things, it seemed a dreary future of endlessly spinning around on the automate, emigrate or evaporate mantra.
But in one of the stranger twists of the seemingly “bad news” of historically high oil and energy prices, comes a new scenario, to go along with the related “good news” of greater awareness of the need for conservation and fuel efficiency. That new twist is the growing attractiveness of the U.S. as a place to make and manufacture things.
As Time Magazine put it in a recent article, at $4 a gallon for gas, suddenly the world gets big again. Shipping a container of goods from China has tripled in price in the last eight years. And really, how many trips to far off manufacturing sites in China and other parts of the Far East does the average business executive need before that starts to seem a whole lot less exotic, as well as expensive?
Cost will be the driver, of course, but if it costs just as much to ship stuff in from overseas as it does from the “Rust” belt, or even Vermont, it would seem a lot more attractive, as well as simpler to do that.
If this return of manufacturing to the U.S. does gather steam, the factories that will profit the most are those that are already highly automated, or have a business plan that relies on high tech manufacturing to lock in savings and efficiencies. There will be more jobs, we would think and hope, but the work force will have to be more skilled because their counterparts elsewhere – despite inflationary pressures – will still be getting paid a fraction of what U.S. workers would need to earn.
Still, it is silver lining, potentially – one of several that results from higher energy prices. Maybe now is the time for government officials in Vermont to start thinking about how they might want to explore cashing in on the possibility.