Manufacturing in the United States has increased for the first time in more than six months, according to a recent report. This trend signals a positive turnaround, as more and more manufacturing companies are “reshorting” jobs back from overseas back to the U.S. So, what’s driving this trend and how long can we expect it to last?
According to the Institute for Supply Management, the manufacturing index increased from 51.5 in April to 52.8. To put those numbers into perspective, that’s the highest index we’ve seen for U.S. manufacturing since the beginning of this year. Any index readings over 50 are generally considered good, and we’re banking towards 53 at the moment.
Market analysts from around the country have offered their insights into these numbers and what they mean, many of whom believe it’s a sign the economy is growing. During the first three months of the year, we saw a slight decline in the U.S. economy. This wasn’t exactly a stock market crash, but growth had slowed and even declined. Now it appears the opposite is happening, as the U.S. economy has since picked back up and is looking stronger than ever.
The Wall Street Journal confirmed the Institute for Supply Management’s readings, saying May reached a 52.8 manufacturing index.
“Rising demand and an increasing backlog of unfilled orders augur well for the nation’s factories this quarter, according to data released Monday by the Institute for Supply Management,”wrote the Wall Street Journal. “Its purchasing managers index—a collective look at production, new orders, employment, delivery times and inventory activity across the factory sector—climbed to 52.8 in May after holding at 51.5 in March and April. A reading above 50 indicates expanding activity.”
So, what’s causing this positive turnaround in the U.S. manufacturing industry? There are several different factors that are likely playing a role in this trend, one of which is the emphasis so many companies are now placing on “Made in America.” It wasn’t long ago when nearly every toy, electronic and piece of clothing was made overseas. Granted, many products are still manufactured overseas, but a substantial amount are now being made right here in the U.S. In doing so, it creates thousands upon thousands of new manufacturing jobs for Americans while laying the roots for a successful economy. Whether or not this trend continues, however, remains to be seen.No tags for this post.