WSJ: New Data Offers Evidence of the Comeback of U.S. Manufacturing

In News by Staff Report

In today’s Wall Street Journal, reporter Bob Hagerty writes that new data from various sources support the claim that the comeback of U.S. manufacturing is real. The U.S. is regaining its competitive edge against China with some predicting that more than 2.5 million manufacturing jobs could be added in the next seven years.

Hagerty writes that the U.S. trade deficit on manufactured goods shrunk by $2 billion this year according to data compiled by the Manufacturing Alliance for Productive and Innovation.  The improvement comes after years of ballooning U.S. trade deficits.

Hagerty also cites predictions  by Boston Consulting Group of  “a surge in U.S. exports, partly helped by lower energy costs and stagnating wages

In a report for release Tuesday, BCG says rising exports and “reshoring” of production to the U.S. from China “could create 2.5 million to five million American factory and service jobs associated with increased manufacturing” by 2020. That, BCG says, could reduce the unemployment rate, currently 7.4%, by as much as two to three percentage points. 

Hagerty continues:

As the boom in shale “fracking” lowers natural-gas and electricity prices in the U.S., and wages stagnate, “the U.S. is steadily becoming one of the lowest-cost countries for manufacturing in the developed world,” the BCG report said. The U.S. will have an edge over rival manufacturing nations in energy costs, along with lower productivity-adjusted labor costs than Germany, Japan, France, Italy and Britain, the report said. That will allow the U.S. to grab a larger share of global manufacturing sales.

Hagerty writes that the U.S. still faces challenges such as a skilled worker shortage, fast rising economies in China, India and Brazil, the U.S. tax structure and and a corporate focus on quarterly results that sometimes deters investment.

Read the entire article here.

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