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Why is manufacturing growing again?

10/30/2018

Why is manufacturing growing again?

Over the past several years, the American manufacturing sector has taken a lot of big steps forward in terms of job creation and output, and now experts largely see these trends as being likely to continue for some time to come. The question many may have is why this rebound is happening now, after decades of a slow, steady bleed.

Interestingly, a lot of this can likely be attributed to the economic rebound since the end of the recession, even as the previous recovery nearly two decades ago did not produce similar results, according to The Economist. Peter Schott, a professor of international economics at Yale University, told the publication that since the end of World War II, the lack of recovery from the early-2000s recession was an exception and not a rule; manufacturing jobs typically rebound just about every time there was a broader economic recovery.

The reason why that didn't happen around the turn of the century, Schott noted, was the recovery came at the same time as the Chinese manufacturing sector took a sizable step forward in importing to America. However, experts now see the more recent recovery as being something that could be here to stay.

"It seems unlikely that the share of manufacturing employment will go to zero," Schott told The Economist. "Maybe we have hit the point where the share flattens off."

In it for the long haul
Indeed, many companies - large and small - are now expanding their manufacturing efforts, in large part because major U.S. retailers are once again investing in American-made goods. That includes the chocolate titan Hershey, which said it was recently able to invest $150 million in its operations to create 350 new jobs, thanks to Walmart pledging to spend a quarter of a trillion dollars on U.S.-manufactured products by 2023.

"These advancements enable business growth that helps to maintain and create jobs across the entire value chain - from manufacturing to fulfillment centers to the retail floor," said Michele Buck, president and CEO of the Hershey Company, said in announcing the job creation.

What's the impact?
Because many of these gains are being felt across the entire manufacturing sector, in every state in the country, the level of employment in the industry has come a long way in a relatively short time. In Nebraska, there has been a 4.7 percent increase in industry hiring over the past year, bringing the total number of people working in the sector there to nearly 103,000, according to the Lincoln Journal Star. That number is in line with pre-recession levels.

In all, the state's factories have been able to bring aboard about 11,800 jobs once again, since hiring bottomed out in Dec. 2009 at only about 91,100 workers, the report said. Moreover, the most recent 12-month growth rate for hiring is the highest seen in the Cornhusker State since August 1995.

As competition for well-trained manufacturing workers continues to heat up, it's vital for companies to make sure their salary and benefits are robust enough to both attract and retain employees. That typically means going above and beyond regional industry norms across the board.

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