Are We Experiencing an American Revolution in Manufacturing?

As we celebrate the 237th anniversary of the American Declaration of Independence, we are getting reports that American manufacturing is sustaining a marked rebound after years of lackluster performance. This is welcome news after the setbacks of the global financial crisis and subsequent deep recession because we believe a strong manufacturing base in this country is critical to maintaining the spirit of American independence!

 

manufacturing

 

For May 2013, the Commerce Department reported U.S. factory orders rose 2.1%, outpacing the revised 1.3% April increase. Bookings for durable goods — which contribute over half of total factory demand — rose by a strong 3.7%. Reuters reports strong vehicle sales by all three major American manufacturers: GM’s June sales increased 6.5% year over year (marking the highest June sales since 2008), Chrysler’s sales increased 8%, while Ford’s sales shot up an impressive 13.4%. Taken together, these recent positive economic reports indicate we are getting back on track. But there may be important structural changes in the American economy on the horizon. Whether you call it ‘re-shoring’ or ‘in-shoring’, there is a definite trend toward the return of manufacturing jobs from overseas back to American shores. In fact, we believe we’re in the midst of a dramatic resurgence in domestic production – a new ‘American-made’ revolution in manufacturing.

 

PricewaterhouseCoopers Predicts a Resurgence in US Manufacturing

We are not alone in our thinking: in late 2012 PricewaterhouseCoopers (PWC), the largest of the ‘big four’ accounting firms, issued a whitepaper titled: A homecoming for US manufacturing? Why a resurgence in US manufacturing may be the next big bet. PWC cites three advantages for manufacturing in the U.S, including lower energy costs due to domestic natural gas production, reduced transportation costs by eliminating costs associated with overseas transport and reduced logistical disruptions to the supply chain by purchasing from domestic suppliers. Two key points jump out. The first is that in 2011 alone, American industrial products companies experienced $2.2 billion in financial impact due to supply-chain disruptions (a great incentive to reduce risk by shortening the supply chain). And PWC’s second point is that even before considering recent reductions in U.S. energy prices, steel made in the U.S. can be 2% cheaper to produce than the equivalent steel made in China. Recent reductions in domestic energy costs will only widen this savings gap in the coming years.

 

American-Made Furniture Helps Power the American Dream

As a proud, American-owned company — whose line of technical furniture is 100% American-made in our modern factory in Austin, Texas — Formaspace welcomes these developments. We believe in the power of the American worker and American manufacturing. In fact, we’ve built our business around the advantages manufacturing in America.  We use local American suppliers, so our supply chain is short. We’re not at the mercy of long shipping delays or delivery disruptions.

 

We know our suppliers personally and have come to trust the higher-quality raw materials they supply us to build our technical furniture products — whether it’s industrial workbenches, assembly line packing tables, steel or wood casework cabinets, computer technician repair stations, clean-room or an entire research laboratory room kitted out with high-quality wet lab tables, lab sinks and ventilation hoods. Formaspace is proud to contribute toward the revitalization of the American industrial economy. We are an example of a modern American manufacturer that fabricates higher quality products at lower prices with quicker turnaround times. And, since we build technical furniture which is often used by other manufacturing enterprises, what we build in turn helps the renaissance in American manufacturing.

 

Integrated Workstations
Formaspace Integrated Workstations

Formaspace Business Furniture is Used Across Different Applications

1.      Industrial production

Industrial production includes automotive, aerospace, machinery, durable consumer goods and much more! Formaspace builds custom steel furniture, assembly line workstations, packing tables, service benches, industrial cabinets, industrial computer workstations, blueprint tables, tool storage boxes and more.

 

2.       Laboratories

Laboratories include biomedical, genetic, food supply and nutrition research. Formaspace fabricates laboratory workbenches, wet labs, ventilation hoods, lab cabinets, laboratory sinks, laboratory chairs, technician workbenches as well as steel and wood casework furniture.

 

3.       Healthcare

Healthcare includes hospitals, production of pharmaceutical medicines, agribusiness and veterinary care. Formaspace manufactures industrial cabinets, sterile surface stainless steel workbenches, custom workbench shelves and drawers, wire racks, modular technical furniture and more.

 

4.       Engineering Design Centers

Engineering design centers include electronics research and development, CAD/CAM engineers and designers, operations and supply chain managers and architectural firms. Formaspace manufactures industrial furniture, stainless steel and maple wood top workbenches, professional drafting tables, custom drawing storage systems, wood and steel casework, modular technical furniture, computer lab furniture and more.

 

5.      Educational and Vocational Training

Educational and Vocational Traning include universities and colleges, secondary education facilities, computer labs, STEM education and more. Formaspace fabricates computer lab furniture, custom computer workbenches, laboratory chairs, secure storage cabinets, document storage systems, professional drafting tables, secure tool cabinets and more.

 

6.       Military and Defense Industries

Military and Defense industries include weapons research, transport, logistics, and cyber warfare. Formaspace supplies laboratory furniture, customer computer lab equipment, workbenches, secure storage systems, modular furniture as well as steel or wood casework cabinetry, laboratory benches and more.

US Army Phase Table 2Kx2K with logo
US Army Phase Table

 

What will the Future Bring? The Aspen Institute is Optimistic

Economists and analysts from The Aspen Institute, in conjunction with the Manufacturers Alliance for Productivity and Innovation (MAPI), predict a strong upswing in American manufacturing in a new whitepaper authored by Thomas J. Duesterberg, titled The Manufacturing Resurgence: What it Could Mean for the U.S. Economy, A Forecast for 2025. If recommended investments and changes to regulations are implemented (including a 12.1% increase in equipment and software spending), “direct employment in manufacturing rises to a level of over 16.3 million jobs, compared to 12.3 million in 2012” and manufacturing would grow to 15.8% percent of the GDP by 2015 –a 3.2% increase over its 11.6% share of the US economic value add in 2012.

 

The report further predicts that a strong export market driven by energy-intensive industries, including chemicals, plastics, fabricated metals, and steel as well as capital goods, such as computers, engines, turbines, and power equipment, aerospace equipment, and industrial products. When you combine all this potential economic activity together, the future of American manufacturing looks pretty good. At Formaspace we are proud to be part of this resurgent American manufacturing revolution! Have a great 4th of July everyone and stay safe!