Type “manufacturing trends” into Google and you will find a general sense of doom and gloom. Jobs are shrinking rapidly. Thousands of jobs have been outsourced over the last decade, and many companies have shut down their American manufacturing operations. However, several new developments point that this tide may be turning.
According to the Washington Post, the federal government is trying a new pilot program to encourage the manufacturing industry in areas that have eliminated or reduced factory jobs. The program grants 20-25 communities grants to develop “strategic plans” for their advanced manufacturing futures. The plans will identify the community’s strengths, potential products for manufacturing and the role the federal government could play in making that happen. Five or six of the communities will receive grants of $20 million each to implement their manufacturing plan.
The efforts, while small, come at a time where the manufacturing industry is shifting. China is no longer the slam dunk geographical choice it once was for U.S. manufacturers. Higher labor wages, the rising value of China’s currency and the cost of shipping goods from China have increased manufacturing costs- they are only 25-30 percent less than the cost of manufacturing in the United States. One estimate by AllixPartners predicted the cost of outsourcing manufacturing to China would be equal to the cost of manufacturing in the U.S. by 2015.
Some manufacturers may choose to stick it out in China, look for alternatives, or bring operations back home. But the high productivity of American workers, need for job creation, and growing emphasis on the manufacturing industry could help give it a much-needed boost.
Operating a manufacturing industry is a complex and dynamic undertaking. We understand this at Newman Crane, which is why we offer far more than your typical business insurance policy to our manufacturer clients. We will help you determine what you need to protect your assets against a broad range of threats. Contact us today for more information about our Orlando Manufacturing Insurance programs. (407) 859-3691