Why Chicago Is Ground Zero for Future US Manufacturing Trends

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How advanced is advanced manufacturing, really?

Perhaps the real question is, will advanced manufacturing advance the economy overall, and contribute enough to make US industries sustainable in our global environment?

Alright, enough advancement. Let’s take a look at a recent NPR article’s take on Chicago ­­– the fair city we publish from – and its manufacturing pedigree, and how the city’s metro area essentially serves as a proxy for US industry at large.

*Don’t miss our upcoming webinar on the latest aluminum market outlook and reducing your aluminum sourcing costs – register now!

Takeaway #1: Scorecarding the Manufacturing Sectors

The author of the article provides a scorecard from a report released today by the Chicago Metropolitan Agency for Planning on innovation, workforce and infrastructure:

Source: Chicago Metropolitan Agency for Planning

Source: Chicago Metropolitan Agency for Planning

Metals industries, including primary, fabrication and machinery, are generally in the middle. Clearly more investment in high tech and pharmaceuticals drives the local sector.

Takeaway #2: There’s Still an Employer/Employee Disconnect

The report shows that the divide between Chicago manufacturing job openings and the skills of unemployed workers are not matching up, as is the trend countrywide. Until they do – with the help of trade school programs, etc. – those “high-paying jobs” promised by President Obama will continue to elude many.

Takeaway #3: End-User Demand Is Still King

At the end of the day, we have to take a look at whether order books are being filled and orders delivered. For that to happen, the domestic economy has to come back to a point that spurs demand for manufacturing end-use products and services.

January’s headline number for industrial production was lower than expected — down 0.1% after having risen 0.4% in December. Last month’s decline was traced to durable goods with decreases recorded in the output of motor vehicles and parts, which dropped 3.2%, and in the output of primary metals, which fell 2.6%.

today's metal prices - MetalMiner IndXThe Congressional Budget Office expects US real GDP to grow by just 1.4% this year, due to “a combination of ongoing improvement in underlying economic factors and fiscal tightening that has already begun, or is scheduled to occur,” according to Bob Garino of Export Tax Advisors. We should, by extension, see pretty firm commodity prices.

However, the CBO also noted that after the economy adjusts this year to the fiscal tightening inherent in the current law, underlying economic factors will lead to more rapid growth: they project 3.4% growth in 2014 and an average of 3% a year from 2015 through 2018, according to Garino.

If positive industrial growth trends continue — and prove to be sustainable — only then will cities such as Chicago see their manufacturing networks improve investment and truly advance their sectors.

*Don’t miss our upcoming webinar on the latest aluminum market outlook and reducing your aluminum sourcing costs – register now!

Comment (1)

  1. Richard Kerr says:

    I happen to be visiting Chicago at this time. When visiting Chicago in recent years, I have been impressed by its clean, spacious, downtown, and broad boulevards, which I assume were a redesign after the Great Chicago Fire of 1871. The thought occurred to me, that as the World shifts to additive manufacturing, and 3D printing, Chicago is very well suited to be the center of this new manufacturing paradigm in the United States. The new model for manufacturing will call for manufacturers to be close to resources, but even closer to their customers. Meanwhile, all models of global warming point to increasing hardships along the coasts, which will drive populations toward the heartland. In the late 1800s, Chicago was one of the fastest growing cities of the World, I suspect that Chicago once again presents the model for the city of the future in the United States. The saying “all roads lead to Rome”, has a strong analogy in the geographical situation of Chicago. A quick glance at a map, and one might just as easily say the same about Chicago.

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