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John Byrd, president of the Association for Manufacturing Technology, is predicting a major upswing in North American manufacturing within the next 12 months, reports this week’s Machinery Market, a UK trade journal.
He cites rising shipping rates, improving US productivity, changes in currency values and escalating demands for raw materials. All these factors will result in a "restructured international landscape," said Byrd.
"Increased shipping costs and ready availability of raw materials will reduce the ability of overseas manufacturers to continue their domination of US and European manufacturing in many categories.
"As these market forces converge, they will create upheavel in the manufacturing sector, resulting in a boom in the North American manufacturing sector unlike anything we have seen in the last quarter century."
Byrd said China’s high demand for raw materials has tripled the cost of shipping these goods by boat. China has, to date, been a major exporter, but it is now a major importer.
"More foreign manufacturers are building plants in China in order to meet the country’s domestic needs, but because steel is needed to build manufacturing plants and produce the goods that are in demand in China, it is likely that shipping costs will continue to increase and that the availabilty of space on cargo ships will continue to shrink.
"With more companies competing for space on a finite number of vessels, moving goods and raw materials to and from China is going to increase both delivery times and prices, causing North American and European companies to begin looking at production locations nearer to their end user markets."
And Byrd says currency factors could also impact favourably on US and European manufacturers:
"US manufacturing costs have been favourably influenced by the strengthening Euro, and it is only a matter of time before the Chinese revalue the Yen, making US-based manufacturing more competitive in relation to most global economies."
Alan Weatherill of Hope of Lancashire, England, the MTB disc brake manufacturer, sees sense in what Byrd is predicting and believes specialist manufacturing in both the US and the UK will benefit:
"Of course it is only good if you can source the raw materials. Luckily, we have some very good European sources for aluminium and titanium and have firm schedules in place. It’s called planning, which many manufacturers seem
to have forgotten."
