Editor's Note: Who's Leading the Recovery?
With a weak dollar making U.S. exports cheaper overseas and tax cuts encouraging business investment in equipment and facilities, U.S. manufacturing has been one of the strongest sectors of the economy since the recession ended in June 2009.
Geraldine Gambale, Editor, Area Development Magazine (Spring 2011)
With a weak dollar making U.S. exports cheaper overseas and tax cuts encouraging business investment in equipment and facilities, U.S. manufacturing has been one of the strongest sectors of the economy since the recession ended in June 2009. This is borne out by an early May report from the Institute for Supply Management (ISM). According to the ISM, manufacturing activity rose in April for the 21st consecutive month, registering 60.4 (readings above 50 signal expansion).
Further, the majority (57 percent) of industrial manufacturers surveyed for PricewaterhouseCoopers' most recent U.S. Manufacturing Barometer are optimistic about the U.S. economy, with 89 percent of those surveyed expecting positive revenue growth for their own companies in 2011. About half of those surveyed (49 percent) also are planning new capital investment, marking the fifth straight quarterly increase in spending projections; 86 percent say they plan on increasing operational spending as well; and 51 percent will add workers.
Much of this good news is reflected in the results of Area Development's 2011 Gold and Silver Shovel Awards report, which is included in this issue. The awards recognize those states and communities that were able to secure high value-added jobs and capital investment from companies in new and expanded facilities. This year, three states are honored as top achievers, receiving Gold Shovels, and nine other states in three population categories are recognized as "runner-ups," receiving Silver Shovels.
We also present our premiere 100 Leading Locations report in this issue. Essentially, the report puts the spotlight on those cities that have been repeatedly mentioned as top performers in well-respected national rankings, including those from the Milken Institute, Brookings, and Forbes, among others.
The states, cities, and communities receiving Area Development's Gold and Silver Shovel Awards, as well as the 100 Leading Locations, are home to manufacturers that have helped to lead the way out of recession. Remarkably, despite this most recent period of economic turmoil, the United States was able to hold on to its 20 percent market share of global manufacturing, while increasing manufacturing productivity by 6.7 percent and dropping unit labor costs by 4.4 percent in 2010.
In light of these achievements, Dr. Thomas J. Duesterberg, former CEO of the Manufacturers Alliance/MAPI, Inc., recently told IndustryWeek that "manufacturing is likely to enhance its role as one of the principal engines of growth." He predicts increased investment in capital goods, as well as a slowdown in global outsourcing in light of cost rebalancing and supply-chain reliability issues - another topic addressed in this issue. Duesterberg calls for "public understanding of the need for continued strength and technological leadership of the U.S. manufacturing sector." Of course, when addressing our readers, that's like preaching to the choir.