US Manufacturing in 2017
A year ago we took a look forward into manufacturing in 2016. Most of our focus was around technology. These included the top tier of hot impactful technologies which are viewed to have most value for implementation. In summary we talked about robotics, additive manufacturing, the internet of things, ecommerce and improved logistics. We waited expectantly to see results. Sure, many of these have seen use, but not as universally or as effectively as we had hoped. Most of these same opportunities still have limited application in the majority of mainstream manufacturing plants and can be included on a list of opportunities for manufacturing changes in 2017.
What will be different in 2017, if anything? The reason that not as much progress was made as we hoped wasn’t that the technologies didn’t exist. They did and they have real value and real potential. Delayed implementation may have, in part, been limited by available capital. Manufacturing indexes in most of the United States remained in negative territory in 2016. This left less momentum to drive technology forward than had been hoped. There are a number of factors that impact manufacturing costs and competitiveness. Energy and commodity costs come immediately to mind. These tend to be uniform for all manufacturers in all parts of the world. Other factors include labor costs, taxes and environmental and other regulations.
In a survey held earlier this year by Grant Thornton, they asked manufacturers which of these represented the largest negative impact on their companies. The largest group, 59.3 percent, identified tax rates as having the largest impact. 31 percent identified regulations and 27.4 percent found labor costs a major impact. In 2017 we are anticipating changes to be made in tax policy and tax rates. We are also anticipating changes in environmental and other regulations. It remains to be seen how much change congress will implement. But if these changes are made effectively, and if the manufacturers survey was right we should see some meaningful new growth in US manufacturing in 2017.
This may be the year when robotics, additive manufacturing, the Internet of Things, ecommerce and improved logistics become not only the newest technologies, but also the new implemented and effective technologies. We can hope this is true. When we take a look forward to US Manufacturing in 2018, a year from now, we will know a lot more. We hope we won’t again need to predict changes that are further delayed before they are made.