By C.T. Carley
To read and listen to some influential economists and media pundits, you would think that U.S. manufacturing is collapsing and that our nation’s economy is becoming entirely “service–based”. In fact, U.S. manufacturing is leading the overall economy with greater overall growth, including growth in employment, and a large part of the reason is the power of innovative technology to create productivity.
The Federal Reserve’s latest monthly report shows that America’s industrial sector is continuing to grow: overall industrial output rose 0.4 percent in June on a monthly basis and by 4.7 percent on an annual basis, marking the 29th consecutive month of annual growth. Annual increases were especially strong for business equipment (12.8 percent), motor vehicles and parts (26.3 percent), oil and gas drilling (8.7 percent) and manufacturing (5.6 percent), especially for durable manufactured goods ( 9.7 percent).
While it may seem heretical to say, I believe it’s a new day in U.S. manufacturing – and, let’s hope, in the creation of jobs.
Nowhere is the growth of manufacturing more evident than here in the Southeast where a number of the world’s largest automakers have set up shop (Toyota, Nissan, General Motors, BMW, Ford, Volkswagen, and Mercedes–Benz). In addition at least two aerospace companies have located manufacturing facilities in the Southeast: Boeing in South Carolina and Europe’s Airbus in Mobile, Ala.
Not only are a growing number of foreign companies moving their operations to the United States but also many U.S. companies are moving their manufacturing back home in a trend that can be summed up with one word: “reshoring.” A study by David Simchi–Levi, an engineering professor at the Massachusetts Institute of Technology, found that about 14 percent of the companies he surveyed plan to move some of their manufacturing back home.
America is the frontier for innovation.
Direct–digital manufacturing is already producing patient–specific implants for hip joints and teeth, and lighter and stronger parts in oil and gas drilling. The epicenter of this technology resides in America.
An enormous amount of electricity is needed to power the fabrication of new products. Luckily Mississippi has the largest single–unit nuclear power plant in the country. A power up rate of 13 percent has boosted Grand Gulf’s generating capacity to 1,443 megawatts. Grand Gulf’s nuclear–generated electricity is the most affordable power, and it will help put our state in the driver’s seat for manufacturing, economic growth and new jobs.
But the Energy Information Administration forecasts that the nation’s need for electricity will grow nearly 25 percent by 2035. That’s equal to about 220 large power plants. Many of those plants will need to be built in the Southeast.
That raises a basic question: Why does our national policy seem to be that electricity is good if it comes from existing plants but not new plants ?
One answer is simple: the Obama Administration prefers solar and wind energy, hence the Department of Energy has yet to approve loan guarantees for any new power reactors. The concern is that President Obama’s environmental supporters oppose construction of nuclear plants. But the administration ties itself in knots when it makes energy decisions based on bad politics. For far too long, the White House has talked about creating jobs but has been inhospitable to strengthening the energy infrastructure that undergirds our economy.
C.T. Carley, Ph.D., P.E., Emeritus Professor of Mechanical Engineering at Mississippi State University, can be contacted at 213 Windsor Road, Starkville, MS 39759.
He writes occasional commentary for op–ed pages.