Recent industry reports confirm that the manufacturing sector of the U.S. and global economy is on the rise. It’s a bright picture for anyone looking to manufacturing as a career path. And manufacturing leaders can celebrate recovery from the recession and a new era on the horizon.
Talent in Demand
Worldwide, manufacturing has survived a tumultuous decade. The manufacturing sector has changed, bringing both challenges and opportunities.
- Globally, manufacturing continues to grow. It accounts for approximately 16 percent of the world’s gross domestic product and 14 percent of employment.
- Service inputs – everything from logistics to advertising and administrative support – comprise an increasing amount of manufacturing activity. In the U.S., every dollar of manufacturing output requires 19 cents worth of support services. In some manufacturing industries, more than half of all employees work in service roles.
- Top talent including innovators and game changers are in demand. Approximately 10 million manufacturing jobs are currently vacant due to growing skills gaps. Talent is a key differentiator in defining the future of the sector.
Durable Goods Market Booming
Sustained economic strength is evident in the durable goods market, as orders surged in November 2013 and planned spending recorded its largest increase in nearly a year.
- According to the U.S. Department of Commerce, durable goods orders grew by 3.5 percent.
- Growth outpaced economists’ prediction of 2 percent and more than reversed October’s estimate of a 0.7 percent decline.
- Excluding transportation, orders increased 1.2 percent, the largest growth rate in six months.
- Non-defense capital goods excluding aircraft surged by 4.5 percent after two consecutive months of decline. This was the largest boost in 10 months. Economists had expected these orders to increase by just 0.7 percent in November.
- Transportation orders rose by 8.4 percent after a decline of 3.5 percent. Civilian aircraft orders grew by 21.8 percent. Boeing received orders for 110 aircraft in November, up from 79 in October.
A Dynamic New Era
Major reports from the McKinsey Global Institute (MGI) and the World Economic Forum present a clear view of how manufacturing will evolve in the years ahead.
- The way in which manufacturing contributes is shifting as nations mature. By 2025, the majority of consumption will occur in developing economies.
- In established markets, demand is fragmenting as customers ask for more variation and after-sales service.
- Innovations ranging from nanomaterials to 3-D printing and advanced robotics promise to create fresh demand and drive further productivity gains across industries and geographies.
Manufacturing Segments by the Numbers
In its report, MGI identified five broad manufacturing segments and analyzed how they would influence where they build factories, conduct research and development and go to market:
- The largest segment by output (34%) includes autos, chemicals and pharmaceuticals. These industries depend heavily on global innovation and close proximity to markets.
- Regional processing industries (28%) include industries like printing and food and beverages.
- Energy and resource commodities (22%) include wood products, basic metals, refined petroleum and mineral-based products.
- Global technological innovators (9%) include computers and office machinery, semi-conductors, electronics, and medical, precision and optical products.
- The smallest segment (7%) produces labor-intensive tradable products.
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