It’s hard to believe that 2016 is rushing past us and that we are on the cusp of 2017. What happened to that 2016 manufacturing recovery that many of the macroeconomic prognosticators envisioned? For those whose long term success is tied to a strong and sustained US Manufacturing economy, we feel as of late like the perpetually optimistic Chicago Cubs fan, being told "wait 'til next year". That "next year" may be now for the Cubs fans, but what about manufacturing?
Seems like back in 2014 the predictions were for a potentially weak 1st half and then a steady recovery in late 2014, continuing on into 2015 and 2016. Business owners were encouraged to expand and invest to put their manufacturing businesses in a favorable position to reap the rewards of a “manufacturing run” that would span several years. Then, in the 2nd half of 2014 began the steep decline on Oil Prices that seemed to change the calculus and to push those recovery predictions out into 2015 or 2016.
In 2016 we have seen a steady rise in Steel prices throughout the 1st half of the year and an accompanying rise in the U.S. ISM Manufacturing PMI. And while the steel price movement was largely supply driven, the PMI certainly showed signals of strength, hovering at or above 50 and maintaining a positive trajectory. Most recently, that PMI dipped again below 50 signaling again a contracting manufacturing economy. So what does it all mean now?
One thing that we do know is that the uncertainty that comes with every election cycle should cease to be the scapegoat as we all cast our votes in a few short weeks. That is not to say that any specific policies will be defined or enacted soon after the magical 2nd Tuesday in November. There will however be, at the very least, a decision as to the political landscape that will be in place in the USA for the next 4 years.
So what should be on our election wish list this time around? Let’s start with advocating for policies that recognize and value the role that Manufacturing has had in the building and sustaining our great nation. When the talk is of a pivot to a “service economy” it just rings hollow. Does that assertion not prompt the simple question; “where does the income originate that is supposed to drive this “service economy”?
The answer is Manufacturing. Manufacturing is the driving engine of our overall economy. Manufacturing creates jobs, it drives innovation, it sustains families and drives GDP upward. Motor, Transformer, Generator, Railroad, Housing, Automobile, Appliance, Aerospace are all foundational manufacturing industries, driven by inventors, innovators, craftsmen and dedicated workers that have been the backbone of our manufacturing economy. As a manufacturing company, we remain hopeful that our political leaders embrace this concept and enact policy and legislation that serve to promote a strong and growing manufacturing economy for 2017 and beyond.
We would like to take this opportunity to thank our customers and suppliers for your ongoing support throughout 2016. We wish you, health, happiness and success as we head into this holiday season. And remember, at Sko-Die, we are ----