By: Malik Singleton, International Business Times Goldman Sachs has a sober analysis of the U.S. manufacturing renaissance. In its new report, “The US Manufacturing Renaissance: Fact or Fiction?” Goldman’s chief economist, Jan Hatzius, says that U.S. manufacturing’s positive figures are a good sign but warns that such recent figures actually show cyclical behavior that should be expected — not structural behavior that could be considered extraordinary. One of the main points he makes in the study, which was released Monday, is that the industry’s growth in the U.S. compared with the performances of manufacturing in other countries says more about the weakness in other parts of the global economy than about the strength of U.S. manufacturing. “Outside the goods-producing sector, U.S. real GDP has grown just 0.5 percent (annualized) since the start of the recovery in the middle of 2009, by far the slowest rate of any postwar cycle,” says Hatzius. “And of course, the gap between U.S. and foreign industrial output mostly reflects the weakness in Europe and Japan following the intensification of the European financial crisis and the Japan earthquake in early 2011.” Hatzius’ report also says there has not yet been a significant output pickup in the production of aluminum, steel, plastics, basic chemicals and fertilizer production as one would expect from currently low natural gas prices. “Total output in the truly energy-sensitive sectors shown account for 7 percent of overall industrial production, or around 1 percent of GDP,” says Hatzius. “So unless the impact of low U.S. energy prices on output growth in these sectors is dramatic, the macroeconomic repercussions are likely to be fairly limited.” “Over the next few years, the manufacturing sector should continue to grow a bit faster than the overall economy. But the main reason is likely to be a broad improvement in aggregate demand, rather than a structural U.S. manufacturing...

By: Katarina Gustafsson and John D. Stoll, The Wall Street Journal STOCKHOLM—Ronnie Leten gets a kick out of the competition taking place these days between his staffers in China and the U.S. Since 2009, the Belgian-born chief executive of Swedish industrial giant Atlas Copco has watched the two groups send a statue back and forth as they battle to be the company’s top market. The losing side gets stuck with the trophy and, in 2013, the dubious prize is sitting in China. If Mr. Leten’s plan holds, the trophy may have to get comfortable sitting in Asia. Incentivized by cheaper energy costs and a more favorable labor and regulatory environment, Atlas Copco is finding its groove in the U.S. and sees American manufacturing as a growing alternative to sending work to Asia. The world’s largest maker of air compressors is the biggest holding of Swedish investment company Investor AB, but strong currencies, inflexible labor terms and a sluggish economy has it looking outside of its home continent. “We used to be a strong European player with a leg in the U.S.,” Mr. Leten said during an interview conducted before flying to the U.S. to ring the opening bell on the Nasdaq. “You need to define U.S. as your home market.” Mr. Leten said that by having strong “legs” in three continents—Europe, Asia, and the U.S.—it helps the company have natural currency hedges. It also helps the company have a manufacturing presence in the countries where it sells products. In addition to air compressors, Atlas Copco makes mining products and tools used for making everything from Samsung smartphones to Boeing airplanes. Atlas Copco isn’t alone among European industrial heavyweights eyeing growth in the U.S. Skanska AB, a Swedish construction company, is looking to offset the malaise in Europe and sidestep the unpredictability in emerging markets by pumping loads of investment due to a positive view on infrastructure development and corporate activity. Atlas Copco has grown its U.S. presence in recent years through a series of acquisitions and organic growth initiatives. Last year, the company purchased a Utah-based manufacturer of drill bits and a Houston-based maker of blowers and pumps. In 2009, it bought the 90-year-old Quincy...

By: Phillip Inman and Josephine Moulds, The Guardian Strong manufacturing figures from China and the US fuelled speculation that a long slowdown in global output is rapidly coming to an end. Commodity prices jumped and stock markets lifted after China’s manufacturing sector expanded for the first time in 13 months in November. The Chinese data, which has shocked analysts over the last year as each month revealed that output tightened further, closely followed a report that showed US manufacturing grew this month at its quickest pace since June. News that the world’s largest economies are expanding, albeit at historically low levels, was enough to overcome weak figures from Britain and the eurozone where industrial output contracted and the outlook remains increasingly gloomy. UK manufacturers’ total orders remained largely unchanged from October’s slump, with a particularly poor showing from UK customers, although export orders improved. As a result, expected output dropped to its weakest level since the end of last year, with 9% more manufacturers expecting to cut orders than are expecting to increase them. Anna Leach, head of economic analysis at the CBI, which carried out the survey, said: “Overseas demand has improved in this month’s survey, but this has not been enough to lift overall demand and support the modest expectations for growth in production levels found in the previous survey. “Business confidence continues to be undermined by uncertainty over events in Europe and the fast-approaching US fiscal cliff. However, we expect UK growth to pick up somewhat in 2013 as this uncertainty gradually subsides and global growth increases.” The UK economy grew by 1% in the third quarter but there are concerns that it will shrink again in the fourth quarter, raising the prospect of a triple-dip recession at the beginning of next year. Germany’s manufacturing sector shrank in November as did that of France, which also saw a sharp drop in employment as factories closed and employers laid off staff. Germany, which has suffered from the recent decline in demand for goods in China and the US, could see a resurgence as key export destinations recover. A more positive view of Germany’s prospects and those of other European countries as well...

By: Scott Malone, Reuters Rising U.S. factory productivity, spurred by falling natural gas prices, could help the nation boost exports of products such as locomotives and factory machinery and add as many as 5 million manufacturing jobs by the decade’s end, a new analysis found. High worker productivity and low energy prices driven by a surge in shale gas production will give the United States a cost advantage in exports against Western European rivals and Japan in the coming years, according to a Boston Consulting Group report set for release on Friday. By 2015, those factors will make average manufacturing costs in the United States lower by 15 percent than in Germany and France, 8 percent than in the United Kingdom and 21 percent than in Japan, the study projects. Factories’ costs in China will remain 7 percent cheaper than those in the United States, however. The competitive gap in some ways reflects the open U.S. labor market, where companies can quickly add or cut workers to meet changes in demand, said Hal Sirkin, a senior partner at the BCG consultancy and author of the report. “In Europe and Japan, it’s relatively hard to lay people off, and because of that you have employees for a long period of time that you may not be able to use,” Sirkin said. “In the United States, there’s much more flexibility.” Besides the ease of adding or firing workers, lower wages and Americans’ readiness to move for work will make U.S. factory labor costs 20 percent to 45 percent lower than prevailing costs in Western Europe and Japan by 2015, the study found. BCG forecast that a glut of natural gas production in the United States would keep the nation’s prices of the fuel 50 percent to 70 percent below those in Europe and Japan, as well as hold down electricity costs. BEYOND ONSHORING U.S. factory employment has grown by about 3.6 percent to roughly 12 million people from a 2010 post-recession low, a trend that could accelerate as the United States becomes a more competitive exporter, BCG said. The increase in part reflects a realization by manufacturers that rising shipping costs and wage inflation in China...