By: The Buffalo News Scott Paul talks to people around the country about the challenges manufacturing faces where they live. “Everybody thinks they have a unique circumstance,” said Paul, president of the Washington, D.C.-based Alliance for American Manufacturing. The reality he finds is that the issues are similar, like companies struggling to find skilled workers to fill job openings. The AAM, a group founded in 2007 by labor and business, aims to bolster U.S.-based manufacturing. Paul, a 46-year-old Indiana native, visited Buffalo for a town hall-style meeting last week, and discussed in an interview why he believes U.S. manufacturing is strengthening: Q: You say you are optimistic about U.S. manufacturing. For what reasons? A: There are a number of things, in no particular order. One is the strength of the auto industry, which is in better shape than we’ve seen in a long time. Even if there are not as many assembly plants in Western New York as there are in the Detroit area, there’s a huge auto supply chain here, and that stands to benefit from a strong Detroit Three. … I think the other thing is energy costs. For energy-intensive manufacturing – and most manufacturing is energy intensive – energy used to be quite a burden. Now, with the onset of abundant domestic natural gas, that dynamic has changed considerably. Now our producers are at a cost advantage compared to most producers around the world, whether you’re working in Asia, South America or Europe. Since energy can be anywhere – particularly in energy-intensive industries – up to 30 percent of the cost of production, that makes a huge difference, it makes them much more competitive. Number three is this broader idea of “reshoring.” There’s certainly an element of (public relations) to it. People like the Made in America store [in Elma], and companies now go out of their way to advertise their products are made in America because they understand that’s what consumers want, or is at least one of the factors they are willing to consider. The other [influence], from kind of a best-practices management perspective, is that offshoring got oversold. I think a lot of companies looked at it very...

By: Bill Saporito, Time Walmart doesn’t make anything. But the giant retailer could play a part in the manufacturing rebound that is taking place in the U.S. with its promise to buy $50 billion more U.S. made goods over the next decade for its Walmart and Sam’s Club stores. It’s a bit ironic, given Walmart’s vast global sourcing organization. But the same forces that are making the U.S. a more hospitable place for manufacturing —higher shipping costs and wage rates overseas among them—have prompted the company to reevaluate its sourcing on a variety of products. “This is a commitment around manufacturing and more economic renewal.  We see it as a critical issue for us in the American economy,” says Duncan Mac Naughton chief merchandising and marketing officer for Walmart U.S. What Walmart sees is a way to lower costs while smoothing its supply cycle by looking more broadly at its distribution system. Although the company may be able to buy an item cheaper from China, the price it pays per piece doesn’t always reflect what it spends to get the product to the shelves.  “When we buy from overseas, we may buy more than we need to fill the container,” says Mac Naughton. “We’re looking at carrying costs through the system in addition to landed costs.” (Walmart has recently been criticized for being out of stock on items, due to a lack of store employees, but the company says its in-stock position is at record levels and that it hasn’t cut employee hours.) Walmart is also hitting some unexpected supply snags as local demand increases in the developing countries where it buys goods. Recently, it found itself short of memory foam for mattress toppers and had to add a U.S. supplier, Sleep Studio, to augment its foreign source. That need to increase capacity can only increase as the middle class grows in India, China and elsewhere. The company will still likely rely on foreign suppliers for those products, such as cut-and-sew garments, that have a very high labor input. But given the more robust regulatory environment in the U.S., domestic suppliers are far less likely to run shoddy plants that endanger workers, as some of...

Despite Slow but Steady Growth from the Bottom, Manufacturing Overall, Many Sectors Below 2007 Levels By: SCDigest Editorial Staff, Supply Chain Digest The so called “Great Recession” that started in early 2008 and reached bottom in most metrics a year and a half later, in June of 2009, hit the economy and US manufacturing very hard. Since then, manufacturing has generally been cited as a consistent bright spot in a still somewhat wobbly US economy, with generally consistent positive numbers in the monthly Purchasing Managers Index from ISM and at least decent growth in manufacturing jobs. Also, there is at least anecdotal evidence that some US manufacturers are deciding to bring production back home from China or deciding not to move existing production offshore to begin with, due to rising wages in China, “regional” manufacturing strategies, and more. But what do the numbers really look like? This week, we take a look at overall manufacturing numbers as compiled by the Federal Reserve, as well the specific trajectories of about a half dozen individual manufacturing sectors, using our exclusive “supply chain web chart” technology. Next week, we’ll be back with analysis of another selection of industries. The data overall and for each sector is in index form, with the base year for each being 2007. So, all numbers reflect the percent up or down over time (January, 1990 through February 2013) from that base year. So, a score of 98 in a given month, for example, would mean production in that period was 2% below the 2007 average. Overall, as seen in the chart below, far from slumping since the early 2000s, as many believe, US output peeked in December of 2007. But output started dropping sharply almost immediately after that, as the recession began, reaching a bottom in June of 2009 at almost 19% below the 2007 average. Great Recession indeed. There has been a long, slow climb back up since then, with production in early 2013 still just over 4% below 2007 levels more than five years later. Now let’s look at some specific sectors. The general consumer goods sector has recovered a little bit more slowly, with production still just over 6% below 2007 output. The...

By: Rana Foroohar and Bill Saporito, Time U.S. manufacturing is back. That’s been the conventional economic wisdom now for several months, and there’s plenty of proof to back it up – rising factory output, strong manufacturing production gains, and lower labor costs that make American workers more attractive. Couple that with the natural gas boom underway in the U.S., which many experts believe will lower energy costs for U.S. manufacturers, and you’ve got a resurgence of a sector that has been shrinking as a percentage of the economy for several decades. “We are probably the most competitive, on a global basis, than we’ve been in the past 30 years,” says GE CEO Jeff Immelt. “Will U.S. manufacturing go from 9% to 30% of all jobs? That’s unlikely. But could you see a steady increase in jobs, over the next quarters and years. I think that will happen.” But at least one economic seer, Goldman Sachs’ chief economist Jan Hatzius, is throwing a bit of cold water on the idea. He recently released a report, which is getting a lot of attention on the web, arguing that the U.S. “manufacturing renaissance” is cyclical, not structural – meaning, the sector is doing as well as would have been predicted under any circumstances at this point in an economic recovery, and that the gains don’t point to a real seismic shift in U.S. manufacturing competitiveness. “Measured productivity growth has been strong,” admits Hatzius in the report, entitled “U.S. Manufacturing Renaissance: Fact or Fiction?” “But U.S. export performance – arguably a more reliable indicator of competitiveness—remains middling at best.” It’s a very interesting point, and it matters a lot to the broader economy. Nations that do better in manufacturing gain an edge in the global economy: For every $1 of manufacturing output in a community, there’s another $1.48 of wealth created. That’s why economic advisors to the President, like National Economic Council head Gene Sperling, have been pushing pro-manufacturing policies. But the Goldman report would seem to indicate that the strength in U.S. manufacturing output reflects more the relative weakness of Europe (which is mired in a debt crisis) and Japan, rather than a long-term positive shift in...

By: Emily Jane Fox, CNNMoney U.S. manufacturing activity continued to expand in March, but the rate of growth slowed, according to a report released Monday. The Institute of Supply Management’s monthly reading on the U.S. manufacturing sector came in at 51.3 in March, down from 54.2 in February and far short of 54, that was expected by economists surveyed by Briefing.com. The index is compiled from a survey of manufacturing supply managers, and any number above 50 indicates the sector is growing. This marks the fourth consecutive month of growth for the sector. Factories have continued to hire, a welcome sign ahead of the monthly employment report on the U.S. jobs market slated for release on Friday. The ISM employment index increased 1.6 percentage points from last month. Survey respondents were mostly upbeat about the outlook in the coming months, but one manufacturer noted that there are still some areas of concern, particularly in the oil and gas sector, which reported a decrease in new orders. “Post-election in the U.S. — companies within the oil and gas sector are still waiting for signs of some regulatory certainty or stability,” said a manufacturer of petroleum and coal products. A separate report on Monday showed that activity in China’s manufacturing sector accelerated in March, as domestic demand continued to pick up steam. HSBC’s manufacturing index rose to 51.6 from 50.4 in February, slightly weaker than its initial “flash” estimate of...