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3 MIN. READ
With all the doom and gloom about economic contraction and looming recession, you might wonder is manufacturing a growing industry? Not long ago, the answer might have been far from encouraging. Fortunately, the U.S. manufacturing sector's outlook is becoming much brighter.
At the end of 2022, American manufacturing started leading the worldwide pack. Production grew in:
● Energy equipment.
● Medical equipment.
● Pharmaceutical equipment.
Oil exports also saw a sizable increase. While COVID-19 put a damper on Chinese manufacturing and higher energy prices negatively impacted European production, the U.S. surged ahead. Recent legislation will give energy-saving sectors like EVs an extra turbo-boost.
Since 2021, more than $200 billion of investment poured into U.S. domestic manufacturing. If you examine where it went, you'll find electric vehicles (EVs) a popular destination. Ford, General Motors Corp., and Tesla are all expanding EV production. Tesla is also investing in facilities for turning out batteries and powertrains, including the Tesla Gigafactory.
You'll find many companies that have reshored, moving production back to the U.S., including behemoths such as Walmart as well as General Electric Co. Appliance Park, Hubbardton Forge and Zentech. Many facilities have adopted technology to achieve the cost control required to sustain domestic manufacturing.
When you reach out to manufacturing decision-makers, you may find that purchases hinge on compatibility with Industry 4.0. This designation refers to "smart" production systems. Manufacturers purchase them to sense and interact with actual processes. That ability permits them to make decisions in real time. They can not only catch glitches before they become catastrophes, but they also address major current concerns such as:
● Productivity.
● Efficiency.
● Sustainability.
These systems also reduce downtime and cut maintenance costs.
Industry 4.0 can also give your clients transparency into logistics. This will enable them to serve their customers more efficiently.
Automated systems increase sustainability by visualizing the waste chain and identifying opportunities to recycle or reuse. This cuts the need for disposal and can decrease the costs of materials. Circularity can also make your clients less vulnerable to supply chain disruptions.
Government programs can help your customers with the investment required for some of these systems.
You may be aware that two pieces of federal legislation are now in effect. The CHIPS Act and the Inflation Reduction Act (IRA) contribute to the U.S. manufacturing recovery. The CHIP Act supports the domestic manufacturing of semiconductors and related products.
The IRA invests $369 billion toward energy investment and climate change. In addition to EVs, this will impact a wide range of manufacturing, from clean energy projects to electrical appliances. You and your customers may also find accessing supply chains for energy-conserving projects easier.
The Small Business Administration (SBA) provides loans through the CDC 504 program. Your customers can access fixed-rate loans of up to $5 million to finance new or upgraded equipment and facilities. Manufacturers can also use 7(a) loans to purchase equipment. The SBA can also assist you and your customers in exporting products.
These programs encourage growth and provide an expanding marketplace for suppliers and support services.
Manufacturing in the U.S. is gaining momentum as it throws off the shadow of the pandemic. According to an economic model, you can expect the gross domestic product (GDP) of American manufacturing to grow by 2.5% in 2023. You can already see the positive effects of government programs. Your customers may, however, find some challenges to potential growth.
In Jan. 2023, manufacturers needed to fill 791,000 jobs. Supply chains are still struggling to recover, resulting in shortages and delays. Manufacturers, however, are employing various strategies to bridge the gap. These include:
● Building stronger supplier relationships.
● Adding extra suppliers.
● Forming domestic partnerships to avoid overseas suppliers.
● Leveraging technologies as in Industry 4.0.
● Upgrading R&D to address supply problems.
● Guarding against cyber invasions.
The increased capabilities afforded by 5G connectivity also allow manufacturers to install high-tech equipment that increases efficiency and reduces costs. Using sensors allows better product tracking, preventing losses and spoilage.
Manufacturers are also moving toward are also tending toward more intelligence gathering and greater use of analytics.
If you sell products or services that support any of these strategies, your opportunities are wide open.
Through the perfect storm of overseas competition and the fallout from the pandemic, U.S. manufacturing has faced some hard times. Many manufacturers still deal with labor shortages and supply chain challenges. Still, through a combination of government support and new technologies, you can see the light at the end of the tunnel – that isn't another train.
With the right tools, you can grasp manufacturing growth opportunities and run with them. IndustrySelect offers precisely what you need to uncover new, favorable prospects. It provides comprehensive and accurate information on 400,000 manufacturers. A subscription will supply you with the names, positions, and direct emails of executives and managers empowered to close a deal. Try a free demo and jump aboard the U.S. manufacturing express.
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