First in a Trucknomics series on American manufacturing

B4T Editorial Staff

Extra, Extra! Read all about it!  Hot off the B4T Press! The best news for the trucking industry has nothing to do with trucking — this according to financial writer John Schultz of the Wall Street Journal. Last year, for the first time since 1997—fourteen lean years—the number of U.S. manufacturing jobs has grown! 

By how much? By 136,000 jobs, or 1.2%. (Stats! Fresh stats! Get ‘em here!) For this year economists predict a 2.5% increase, or 330,000 new jobs. (Stats! Red-hot stats!) 

What’s Good for Manufacturing Is Good for Trucking
Whatzat got to do with trucks? Everything, you clueless imaginary inquisitor. Domestic trucking volume is roughly divided fifty-fifty by retail and industrial. This is good news across the board, from big fleets to O-Os. WSJ writer Schultz opines that it is the best development for the truck industry since deregulation in 1980. Says he, “As one who has never bought into the Great Globalization Theory, I welcome this news. And so should everyone connected with the trucking industry.” 

Speaking on behalf of the entire trucking industry, Mr. Schultz, we do too, and we will promptly spread the word through B4T’s many communication outlets. 

“These are jobs,” Schultz writes, “that will directly affect freight volume and thus rates and profitability in the industry. As the offshoring craze begins to show cracks—anybody else had an offshore call center experience worthy of ‘Saturday Night Live?’—U.S. manufacturers are beginning to see value in keeping plants here.” 

The “Shining Star”
We love that “Saturday Night Live” line, Mr. Schultz, and much as we’d like to share our own favorite SNL moments, we want to let Thomas Runiewicz get a word in here. Mr. Runiewicz is an economist at IHS, a fifty-year-old firm that provides economic forecasting for entire countries and industries. On the company’s public site, IHS Global Insight, Runiewicz calls manufacturing “the shining star of this recovery.” He expects total U.S. manufacturing jobs this year to rise to about twelve million. 

IHS is not the only financial firm with a sunny forecast. Moody’s Analytics, a subsidiary of the hundred-year-old credit rating firm Moody’s, agrees. Moodys and IHS see U.S. manufacturing continuing to grow at least for the first several years of this decade. 

Goods to Go
Please note the bedrock credibility of these sources. Here at Blog4Truckers, we don’t just scrape up worn news and suspect stats from the handiest basement blog. When we say, “American Manufacturing is Back” (!), we support it with quotes and facts stolen from the most reputable sources in the country. For instance, here’s another guaranteed fact, not just somebody’s cobbled-up conjecture, to wit: 

“Currently, manufacturing jobs account for about 9% of all U.S. non-farm jobs; the average pay for those jobs is roughly $22 an hour, or nearly twice the average for service jobs, according to government data.” (Wall Street Journal editor James R. Hagerty) 

Whatza point? The point is that manufacturing jobs are good blue-collar jobs, not dead-end “Izzat-to-go?” jobs. A rise in U.S. manufacturing will create goods to ship but it will also create wealth that drives up demand for goods. And whether those goods are from America or elsewhere, they will need to be shipped, creating capacity for trucking, creating jobs for truckers. 

The Decline and Fall and Slow Crawl Back of American Manufacturing
So just who are the companies that are involved in this trend? They’re brand names you know and trust, such as Ford, Caterpillar and Whirlpool, who all are taking advantage of tax breaks, excess capacity, infrastructure and other built-in advantages of employing a U.S.-based work force. 

Of course, it will take more than a year or two of increased manufacturing to pull the economy out of its current trough. More than 144,000 factories—that's factories, not jobs—were lost in the nineties. Manufacturing is now only 11% of our total economic output, a third the size it was in 1950. Entire domestic industries, such as furniture and footwear, have been wiped out because of cheap labor and the “friendly regulatory environment” of China, Brazil, India and smaller countries. 

From Diesels to Dishwashers
On the other hand, there’s a positive side to the steroidal growth of China and Brazil and India. They don’t manufacture everything, and what they don’t, they buy from us. No, not furniture and footwear, but there’s plenty of other consumer goods that we ship overseas. 

Not to mention heavy machinery, such as diesel engines. Indiana-based OEM Cummins has more than doubled its first-quarter income from a year earlier. “Our first-quarter results reflect continued strong growth in key international markets, especially China, India and Brazil,” said CEO Tim Solso. “We are seeing significant growth in demand for our products and services in nearly every geographic market we serve.” 

U.S. durable goods orders from February and March (January was sluggish) were strong across the board, reports the granddaddy of news services, Britain’s venerable Reuters, saying: “The fairly strong manufacturing tone was captured by leading home appliance maker Whirlpool Corp, which reported a $5 million rise in first-quarter net profit.” The Reuters report concludes that the data indicates “a vibrant factory sector” in the American economy. 

We Love You, You Muscled Vibrant Creature!
You hear that, American factory workers? You are “vibrant!” We thought “vibrant” was one of those shiny words reserved for Hollywood glamour girls. Roll up your sleeves and tuck your hair back in that kerchief, Rosie the Riveter. Somebody reopened the old mill and they’re hiring vibrancy! 

Sources for this article include Moody's, IHS Global Insight, GLG Group, Reuters, White River News and the Wall Street Journal  

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