Manufacturing Recovery? Who says?…

October 4, 2012 - 2 Comments

…well, it looks like several folks are saying it!

American Factories were going all out in September – is it a sign that the US economy is picking up?  Wall street certainly seemed to respond well to some key indicators at the beginning of October.

Take a look at some of the performance metrics below and you’ll get an indication of why…

  • The ISM (Institute for Supply Management) Index (PMI™)  rose to 51.5 for September from 49.6 in August. Anything above 50 shows growth (growing rather than contracting), and a nearly two point rise reverses previous months declines, the fastest pace since May.
  • Pace is slow, but signs are hopeful. The new orders index rose from 47.1 to 52.3 suggesting humming production this month, and suggests November will be good too.


  • The economy isn’t growing as fast as the Fed Chairman would like. Hence an open-ended QE3 (Quantitive Easing 3) and a statement that interest rates will remain low until 2015.
  • JP Morgan Economists are saying that we’ve seen a slow down in US Manufacturing and it’s tracking more like the overall US economic growth – sluggish, suggesting the best may be behind us. Still growing though, but slowly.

Overall I’m a bull on US manufacturing. There are a number of US companies looking to bring back jobs from overseas. But the labor shortage in the US is getting worse. Baby Boomers retiring, not enough skilled or trained workers to take their place. A recent Deloitte and The Manufacturing Institute study stated that manufacturing sector can’t find workers with the right skills to fill around 600,000 jobs. Hopefully Cisco’s Remote Expert and Cisco’s other solutions will help. Check out Ron Kafka’s blog titled “Realize Business-Wide Benefits with Cisco’s Remote Expert” to find more about Remote Expert.

Now part of that is that manufacturing is still seen as a dirty, grimy place to work for not very much compensation. In actual fact, manufacturing is an exciting place to be today. Young people can often  ‘BYOD’ or ‘Bring Your Own Device’ to work and get involved in making products that are really changing society. The opportunities for the right folks – young and old, are enormous. Now I’m not saying it’s as great overseas and despite Northern Europe’s reputation for smart working practices, that region has been hit hard in the last quarter. China’s factories contracted for the second straight month too. But I’m still optimistic.

We still need to see how QE3 helps, and we may have a few speed bumps on the way  in terms of the  election, the ‘Fiscal-Cliff’ and the fortunes (or not) of Europe and China, but I’m cautiously optimist – maybe it’s  the combination of the American optimist and the ‘Keep Calm and Carry On’ Brit in me – perhaps there are benefits to being a duel national after all!

Next blog I’ll look at what others like McGladrey are saying – their latest research looks a little gloomy! As always let me know what you think!

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  1. Thanks for your comment. Did you see the opening ceremony for the Olympics in London? I wasn’t able to be there, but caught it on US TV. Reminded me about how all this manufacturing stuff started in the first place!

  2. … but I’m cautiously optimist — maybe it’s the combination of the American optimist and the ‘Keep Calm and Carry On’ Brit in me — perhaps there are benefits to being a duel national after all! (I feel the same way, that make us “two”)…Thanks for having the pleasure to read your interesting keynote, regards from PR…