Executive Briefings

Could There Be Hope for Jobs in U.S. Manufacturing?

To paraphrase Mark Twain, the demise of U.S. manufacturing has been greatly exaggerated. The country remains a global manufacturing powerhouse, accounting for one-fifth of the world's manufacturing output in real terms. U.S. manufacturers exported $1.3 trillion in goods in 2010-a sum about equal to the size of Australia's economy. If current trends through August hold, 2011 will be an even better year.

The problem is that all this activity doesn't create as many jobs as it used to. Far from it: American manufacturers have been producing much more with many fewer workers.

Still, there are intriguing signs that the manufacturing job picture could stabilize or perhaps improve in the coming years, thanks to a combination of forces unleashed by the Great Recession and by globalization. Specifically, the impact of rising labor costs in key emerging markets, higher logistics costs, and a greater appreciation of the risks embedded in extended supply chains is driving management to reconsider the benefits and costs of keeping-and adding to-onshore production.

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To paraphrase Mark Twain, the demise of U.S. manufacturing has been greatly exaggerated. The country remains a global manufacturing powerhouse, accounting for one-fifth of the world's manufacturing output in real terms. U.S. manufacturers exported $1.3 trillion in goods in 2010-a sum about equal to the size of Australia's economy. If current trends through August hold, 2011 will be an even better year.

The problem is that all this activity doesn't create as many jobs as it used to. Far from it: American manufacturers have been producing much more with many fewer workers.

Still, there are intriguing signs that the manufacturing job picture could stabilize or perhaps improve in the coming years, thanks to a combination of forces unleashed by the Great Recession and by globalization. Specifically, the impact of rising labor costs in key emerging markets, higher logistics costs, and a greater appreciation of the risks embedded in extended supply chains is driving management to reconsider the benefits and costs of keeping-and adding to-onshore production.

Read Full Article