It’s no secret by now that the manufacturing sector took a big hit during the 2007-2009 recession. Upwards of 2 million jobs were lost, while industrial production fell off sharply as consumer demand for manufactured goods fell sharply. Even manufacturing productivity, measured in output per hour, fell sharply-something that rarely ever happens.
Finally, things seem to be turning around. Despite the sluggish job growth in the overall economy, manufacturing job growth has been in positive territory 12 of the past 16 months, with the pace of job growth picking up through 2011. The manufacturing jobs opening rate, as published by the Bureau of Labor Statistics, has been steadily increasing since bottoming out in mid-2009. The ISM Report on Business released today shows all major indicators for the manufacturing sector trending upwards, with the exception of inventories. Exports have also increased, with the value of goods exported from the U.S. up over $4B since 2009Q1.
Although the manufacturing sector is looking strong, there are also signs of deceleration in the rate of growth in the manufacturing sector. All of ISMs indicators, while growing, are increasing at a slower rate than previously, and the Census Bureau is showing shipments of manufactured goods and new orders for manufactured goods down in recent months.
All things considered, the future of the manufacturing sector is looking up these days, especially when compared to the past few years. As the broader economy continues to improve, continued strength in manufacturing will be essential to a broad-based, sustainable recovery.
For more additional information on the data mentioned in this post, please visit:
U.S. Bureau of Labor Statsitics
U.S. Census Bureau Manufacturer’s Shipments, Orders, and Inventories
May 2011 ISM Report on Business
