U.S. Manufacturing Mid-Year Review

Recently, we posted an article addressing the benefits of digital transformation and the industry concern that such an investment could cost many their jobs. 

In this article, (POSTED HERE) we shared our belief that digital transformation will lead to, not just more jobs, but more fulfilling jobs with greater chance at advancement. 

Today, to help support this statement, we are going to take an overhead look at the manufacturing sector of today and look at some hard facts pulled from recent headlines that will, hopefully, ease any lingering concerns you might still have on the subject. 

American Manufacturing in 2023

There’s been a lot of talk over the past few months about the dwindling manufacturing sector and the steps the government plans to take to combat this decline. 

Naturally, this is a concern for anyone who finds their career within the manufacturing field. 

Data released by the Census Bureau, however, states that, recently, not only did production at American factories increase, but so too did the production of the factories themselves! 

For April 2023, construction spending by U.S. manufacturers reached nearly $190 billion compared with $90 billion in June of 2022, with manufacturing accounting for around 13% of non-government construction. That’s more than double the spending in just a year’s time at a time when construction spending in most other areas of the U.S. economy has been in decline. 

… But why has there been such an increase? 

Many would lay that on the steps of the White House, whose current inhabitants have taken steps to help boost the manufacturing sector over the past several months as it works its way out of its most recent industry slump. 

… And boost it has! 

According to Kearney’s 2022 Reshoring Index, 96% of American companies have shifted production to the U.S. or are evaluating reshoring operations (a definite spike from the previously reported 78% in the 2021 index.) 

Added to that, the May Bureau of Labor Statistics jobs report states the U.S. has added around 800,000 jobs in manufacturing employment over the last two years alone, employing around 13 million workers. 

As you can see, trying to regain the manufacturing high ground from overseas competitors such as China has been a top priority for government leaders as of late and it appears their efforts to reshore the industry has not fallen on deaf ears. But, despite this rise in available jobs, there’s still the issue of filling them with qualified employees. After all, just because a job is open doesn’t necessarily mean that the workforce is still there to fill such a position. 

In fact, a lack of qualified workers in the employment pool has proven itself to be a top concern for manufacturers across the globe, leading many to invest in automation and finally take the jump towards digitally transforming their facility. 

The National Association of Manufacturers recently relayed their belief that the manufacturing skills gap caused by the labor market’s struggle to find workers with highly technical and manual expertise, could lead to 2.1 million UNFILLED jobs by the year 2030. This only further supports our belief that automation within the industry could only help solve an already evolving job crisis within for manufacturers, not hurt it. 

That’s where digital transformation steps in… 

You see, by investing in digitally transforming your facility today, you are taking the necessary steps to prepare yourself and your factory for the challenges of tomorrow.  

While investing in digital transformation can be a costly venture, when comparing it to continuously increasing labor costs due to skyrocketing interest rates and today’s overall poor economic health, you can clearly see an investment in digital transformation today is MUCH cheaper than the alternative.  

… And, even if an employer was able to pay triple the salary of their competitor’s capabilities to attract the best talent on the market, that doesn’t solve the issue noted above of an overall lack of qualified employees in the employment pool.  

Digital transformation tackles both of those issues.  

A facility that has undergone a complete digital overhaul will no longer need to worry about labor costs and labor shortages because they’ve taken the necessary steps to prepare themselves for such situations.  

As for meeting increased customer demand, you’ll find that, by investing in digital transformation, your facility will be better equipped and more dependable to handle and deliver our hoped-for surge in business.  

With overall expenses down, a lower dependence on a workforce that basically no longer exists, new inventory flowing, and profits soaring, almost all of the industry issues noted above slowly begin to resolve themselves and we find ourselves – once again – leading the world in manufacturing capabilities.   

That’s good for the country, that’s good for the economy, that’s good for business, and that’s good for you! 

The Wrap Up

Folks, the U.S. manufacturing sector is definitely on its way back. 

This is good news for all of us! 

Thanks to the government support we’ve seen come out of Washington over the past year, many of our once thought lost businesses are slowly but surely making their way back onto U.S. soil once again. A fact proven by the statistics listed above. 

… In these positive times, the only lingering question that remains as these factories return, however, is whether or not their abandoned workforce will do the same? 

That’s one of the many reasons we find ourselves in a digital revolution today. 

A company that is on the digital transformation journey modifying its workforce moves away from the grunt work paradigm and, instead, roles are opened up to more fulfilling positions that are more valuable to the company and more engaging for the worker. 

The modern transformation journey company is able to attract and retain today’s employee candidates because technology empowers dedicated employees with guided tasks while also automating tedious components like data entry and overdone inspections, ultimately, making the work more rewarding for all. 

This is the new paradigm that justifies a business pulling from a labor-intensive model from offshore factories. And, as most industry leaders have realized (or soon will) the only way forward is to adapt. 

Remember, this isn’t the manufacturing industry of yesterday. Nor is it the manufacturing industry of tomorrow. We are firmly in the present and, as such, we can only learn from the past to better prepare for the future. 

And anyone looking to prepare for the future of U.S. manufacturing should certainly be well aware of the many benefits that come with investing in digital transformation. 

P.S. If you’re interested in learning more about bringing your facility up to date with a digital transformation, then we encourage you to reach out to our team here at Rain Engineering. 

Our years of manufacturing expertise could be just what’s needed to help you succeed on your digital journey.