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Manufacturing Output Rises In The Us

628 words - 3 pages

An economic revival is here according to an article in The Atlantic titled “America’s Coming Manufacturing Revolution”. In the author’s own words, “The combination of lower energy prices, innovative information technologies, and advances in robotics and materials science are powering a manufacturing revolution that will reinvigorate the U.S. economy,” (Naím, Apr. 21, 2014). Bold words considering the recent financial crisis and drama in the geopolitical arena, but is there enough evidence to back his claims of this so called “manufacturing revolution”? Several news outlets are reporting gains in manufacturing operations such as increases in labor and use of factory space. Using this ...view middle of the document...

Manufacturers pay rent to operate in these factories, but the cost of rent does not change depending on how little or how much space is used. Therefore, any manufacturing company should try to use as much space as possible before purchasing more factory space. The Federal Reserve Bank assessed “potential being used at factories, mines and utilities in the U.S. reached 79.2 percent in March”. Comparatively, the national average from 1980 until now is 79.4 percent (Chandra, Apr. 20, 2014). According to an article in Reuters, this is the highest capacity utilization since June 2008. (Nawaguna, Apr. 16, 2014) Incidentally, as resources are used more efficiently, manufacturing output will increase.
Higher labor costs and allocation of factory space are excellent indications that manufacturing output has indeed gone up within the United States. However, I would not consider it a “revolution” by any means because most of the data suggests this is only a gradual upward trend and hasn’t changed any aspects of business. Although, if this upward trend...

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