Manufacturing: Leading the Recovery

Manufacturing continues to lead the charge as IMTS 2012 had 100,200 attendees from 119 countries, representing 1,909 companies, and covering 1,248,000ft² of exhibit space.

Manufacturing has been a strong component driving the country’s economic recovery and the just completed IMTS – The International Manufacturing Technology Show 2012 proves that manufacturing continues to lead the charge. Total registration for this pivotal event was 100,200, covering 1,248,000ft² of exhibit space with 1,909 companies from 119 countries.

Clearly, the dynamic future of manufacturing is going to be more heavily steeped in data, analytics, software, interoperability, and burgeoning advanced manufacturing technologies, such as additive and collaborative manufacturing, micro- and nano-technology, high functioning robotics, and fiber optics. The United States has always been the best at innovation and entrepreneurship to accelerate these new technologies and innovative ideas into commercial market successes. What we saw at IMTS 2012 proves that technological advancements will continue to be a prime source of productivity improvement.

We used our IMTS Emerging Technology Center (ETC) to bring the manufacturing community a glimpse into this dynamic future. We highlighted collaborative manufacturing in a section that featured a live, on-site car build done by Local Motors, an open-source automaker that collaborates with a community of engineers, designers, and car enthusiasts to produce its vehicles.

Additive manufacturing was another important focus in the ETC. We demonstrated how 3D printing, laser sintering, and other technologies allow for innovation of function and design at every stage of development, allowing companies to go from concept to prototype, and sometimes finished product, within days instead of months.

As part of all this, we are seeing momentum turning our way as companies re-evaluate total cost of ownership and the quality and logistical advantages of making products in the United States. More and more foreign companies are expanding or starting manufacturing plants in the United States, a trend that will continue with domestic manufacturers.

In general, conditions continue to be favorable for the manufacturing technology market. The market expects to finish on a nice 10% to 15% growth in orders for 2012 compared to 2011. This is phenomenal, taken in perspective. In 2010, the industry realized a 91% gain compared to 2009, and another 66% last year.

Capacity utilization rates for durable manufacturing are near 80%, with some very important sectors doing much better. The fabricating metal products sector is operating near an 85% rate. The industry that represents more than one-third of all orders placed for production equipment in the United States – the job shop industry – is part of this group and is expanding capacity at a rapid rate. Typically, a capacity utilization rate of more than 75% represents a shift in an industry’s orders going from being for replacement to becoming orders to support expansion. More than 80% supposedly means a rapid increase in capital expenditures to support expansion of production capabilities. The fastest paced expansion is in the industrial machinery sector where capacity utilization exceeds 85% and has for months, it also is the sector that includes the manufacturing technology industry – AMT’s members.

U.S. corporate profitability is very strong. Cash is king in the manufacturing sector. It helps support expansion while financing customer purchases and maintaining a healthy supply chain. Another positive for manufacturing is the increasing trend toward re-shoring and on-shoring. The momentum started a couple years ago and continues to grow as more and more manufacturers are taking advantage of new manufacturing technology and equipment, minimizing the need to chase low-cost labor all around the world.

The best analysts studying this industry suggest that we could see some hesitation in order activity in the last couple of months due to political uncertainty, deciding control of the White House and the Senate in November. There are also major issues outstanding on the legislative agenda that could have a significant impact on our industry, most notably whether or not to extend the Bush-era tax cuts and dozens of tax provisions that expired or are expiring at the end of the year. The president supports letting the tax cuts expire on incomes above $250,000. That hits many successful small manufacturers that file individual tax returns for their businesses. The R&D tax credit expired for the fourteenth time last year. Bonus depreciation and Section 179 expensing amounts decreased significantly. These all play a critical role in investment decisions. It is no wonder that companies who put two- to five-year business plans together to run their companies are wary about making long-term commitments.

Even with all this good news, the job situation remains unresolved, especially considering the projected numbers due to re-shoring. Despite the high number of Americans out of work, right now, about 600,000 manufacturing jobs continue to go unfilled. By the end of the decade, this number could rise to almost 3 million. The current factory floor is far different from before. It is awash with new technologies and processes that require advanced training and adaptable skills.

AMT teamed up with Trillium CNC / CNC Jobs to host the IMTS Job Center, offering advice on how to obtain, market to, and secure top-level talent for technical positions, as well as recruit workers for open positions.

At IMTS, for the first time, we teamed up with Trillium CNC / CNC Jobs to host the IMTS Job Center. These experts in technical recruitment and staffing were on hand to offer advice on how to obtain, market to, and secure top-level talent for technical positions, as well as recruit workers for open positions.

“It was a huge success, averaging almost 20 new companies each day posting openings that resulted in several hundred opportunities at every level from CNC operator to president,” says CNC Jobs Director Bob Lawson.

On the applicant side, the Job Center attracted almost 75 candidates each day and will continue to make matches post-IMTS.

For many years AMT has partnered with the National Institute for Metalworking Skills (NIMS) to bring students to the show to learn about the opportunities in the industry. The NIMS Student Skills Center provides a forum for students to meet representatives from major industry employers and STEM educators to talk one-on-one about skills, technology, and life-long career paths. We are proud to have hosted 9,325 students from more than 300 high schools and college programs.

Beyond IMTS, we are committed to being a catalyst in the development of a smartforce of workers up to the job. AMT has partnered with the National Coalition of Advanced Technology Centers (NCATC), which includes more than 160 of the nation’s leading community colleges, Project Lead The Way Schools, as well as the nation’s top four-year degreed colleges and universities. Through education partnerships, the best candidates will be directed to our industry through MTCareers.org, connecting students to employers who have open positions that need to be filled.

AMT is now planting seeds in schools for the future of manufacturing and its smartforce. Another initiative is jump-starting internship programs by modeling successful programs that are still in place, newly created, or working well.

For shop floor employees, MTUniversity allows AMT to deliver job assessments and online classes for its members, and, to assure that shop floor candidates are qualified upon being hired, AMT is working closely with NIMS to assure that young people have the knowledge and credentials to get to work right away.

We have come a long way since we first issued The Manufacturing Mandate in 2009. Since then, the U.S. manufacturing sector has been the driving force behind the economic recovery. Today, with issuance of the second generation of the Mandate, policymakers, industry leaders, and academia agree on the major aspects of a national strategy that will accelerate and sustain this manufacturing resurgence. They are aligned with The Manufacturing Mandate core principles of incentivizing R&D and innovation; increasing global competitiveness; and building a smartforce that is equipped with the knowledge and skills necessary for careers in manufacturing.

The journey is not over, but it is exciting to see that manufacturing has been the force behind the current economic recovery.
 

AMT – The Association For Manufacturing Technology
McLean, VA
www.amtonline.org