Manufacturing 2.0
Rock River Valley manufacturing experts discuss the many facets of manufacturing: technology, education, training, events, people and any other aspects of this important segment of our economy. They’ll use this blog to get the word out and solicit feedback on local and global manufacturing. They hope to better engage our employers, employees and our future work force and increase their understanding of manufacturing.

Archive for May 11th, 2008

Slow Growth in Local Economy

1 comment May 11th, 2008

Today’s story by Alex Gary and quotes by John Lewis need further expansion. John is right about the local economy and the impact of manufacturing. As it stands now, 21% of the Rockford MSA workforce are employed in manufacturing. If you use a conservative multiplier, another 21% support manufacturing. So around 42% of the regions economy are directly impacted by the manufacturing sector.

Why is manufacturing holding up so well? If you review the Department of Commerce data, exports of Capital Goods have increased by 34% from 2004 through 2007. And the YTD data through March show Capital Goods are 9% ahead of last year. If a company is directly exporting or selling to companies that export, then you will benefit.

Why is this so? The Euro has strengthened against the dollar by 24% from January 2004 through March 2008! That goes a long way in making our products more competitive against the European companies. Going unnoticed is the strengthening of the Chinese Yuan against the dollar by 18% since mid-2005 when up until then, the Yuan was fixed.

Also helping our companies has been the drive to improve productivity through a variety of process improvement strategies. Nationally, Output per hour has improved by 11.6% since 2004, with a +4.1% in the first quarter 2008!

So my message is…get into the export game, either directly or sell to customers who export and keep on making productivity improvements. It’s a good formula for keeping our local manufacturing economy growing.

Bob Trojan