Yesterday, I participated in a panel in Chicago co-sponsored by the Chicago Council on Global Affairs and the NAM titled, “Made in America: A Revival in Manufacturing?” Diane Swonk, the Senior Managing Director and Chief Economist at Mesirow Financial, did an excellent job moderating our discussion, reminding the audience that “American manufacturing is the most productive in the world” (which she repeated on Twitter). She spoke about growing up in Detroit, the daughter of an autoworker, and is someone who truly cherishes the fact that manufacturers are helping to lead the economy out of the recession.
Despite much of the gloom-and-doom discussions about the economy that permeated the airwaves last week, the overall tone of our discussion was one of optimism. Panelist David Beebe, the Vice President of Manufacturing Operations for Navistar, questioned whether we even needed to have the question mark in the title for the panel, hoping that everyone recognized that there is a revival in manufacturing.
While there has been some weakness in the sector of late — mainly from transitory factors, as Diane Swonk noted — manufacturers seem poised to take advantage of a growing global economy moving forward. It helped, of course, that much of the news this week has been positive. On Monday, the NAM/IndustryWeek survey showed manufacturers optimistic about their future sales, employment, capital spending, and exports. This was followed by an upbeat assessment on the economic future in the Federal Reserve’s Beige Book and yesterday’s strong export statistics for April.
Panelist William Strauss, a Senior Economist and Economic Advisor at the Federal Reserve Bank of Chicago, and I spoke about the bounce-back in manufacturing since the recession, with the sector generating over 14 percent of the net job creation since December 2009. Much of that growth has been in sectors that have taken advantage of trade opportunities and benefitted from pent-up demand and a growing economy. For the Midwest (and the nation), the economic benefits of this growth can be tremendous.
One of the keys to future success will be the ability of manufacturers to stay flexible, according to David Beebe. He discussed how Navistar is pursuing growth overseas, while also making its U.S. operations more efficient and profitable. He also spoke about the need for a strong business climate to help facilitate greater growth in both manufacturing and the overall economy.
Indeed, much of the conversation addressed the challenges of rising raw material costs, excessive regulatory burdens, and the desire to have sound and certain fiscal and monetary policies. I emphasized the need for competitive tax, trade and regulatory policies to support job creation and keep manufacturing in America strong and vibrant.
Hopefully, the 125 business executives and members of the media in the audience came away from the breakfast session more optimistic about manufacturing’s future.
Chad Moutray is chief economist, National Association of Manufacturers.