At Panjiva, we’re often asked if manufacturing will ever return to the United States. Unlikely — at least in the sense that we are unlikely to see manufacturing in the U.S. on the scale that we saw in the 20th century. However, there will always be some sort of manufacturing in the United States. And, interestingly, The Wall Street Journal reported yesterday that the domestic manufacturing sector grew in 2010 and is projected to grow again in 2011.
How large will the U.S. manufacturing sector ultimately be, and what will it look like? These are important questions, to which there aren’t great answers.
Analyst Derek Singleton hints at the answers with his “Five Strategies for Growing as a Domestic Manufacturer.” Good stuff. Specifically, Singleton points out that high-skill (as opposed to low cost) manufacturing may have a future in the U.S., and he suggests that companies think about manufacturing goods for emerging markets.
Another possible niche for domestic manufacturing: small volume, rapid response manufacturing. China is great at delivering low cost product at large volume. But more and more, companies want to start with small volumes and then respond quickly if demand materializes. Wouldn’t it be great if America had an industrial base that could fill this niche?