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Revenues Decline for U.S. Manufacturers As They Await Economic Reforms

Manufacturing is in the midst of a new Industrial Revolution: 3-D printing, the Internet of Things, robotics, artificial intelligence.

Revenues Decline for U.S. Manufacturers As They Await Economic Reforms

These technologies are present in a wide range of sectors - from automaking to medical devices. The possibilities have reinvigorated interest in the art of making things.

Meanwhile, manufacturers are nervously optimistic about what the future holds as the Trump administration continues its push for major economic reforms. It's unclear how much of an impact the administration has already had on manufacturing.

Total revenues declined for the second straight year to $5.07tr, down from $5.38tr last year, according to IndustryWeek’s U.S. 500 - an annual ranking of America's largest public manufacturers, based on revenue. Momentum may be building, though, as new policies take shape.

"Economic growth, according to the nation's supply executives, got off to a hot start beginning in September 2016," says Timothy Fiore, chair of manufacturing for the Institute for Supply Management's Business Survey Committee. "The combination of the potential for less regulation (or a reduction in increased regulation) coupled with low energy prices provided the needed spark. Currently, uncertainty around many government-directed issues — border tax, targeted anti-dumping decrees, ACA repeal, increased international tension and the uncertainty that that brings — likely are contributing to a wait-and-see attitude."

The oil and gas industry had a major impact on overall IW U.S. 500 revenues. The sector, which tied for the largest on the list with 54 companies, experienced an average revenue drop of 13.7 percent. Oil and gas industry declines were directly related to lower fuel prices, Fiore says. Oil prices rebounded to about $50 a barrel by the end of 2016 from a low of about $30 per barrel earlier in the year. The low prices are impacting the industry's investment returns, he says. "The big issue with this industry is long-term massive capital investment that takes years to come on line, and many times they miss the market," Fiore says.

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