The ExOne Co. disclosed plans last week for an initial public offering, giving investors an opportunity to place a bet on technology many say could reverse the long, steady decline of U.S. manufacturing.
The North Huntingdon business is one of a growing number of practitioners of a technology industrial mavens have named additive manufacturing. It involves making complex products using digital imaging rather than bending, molding, punching or grinding parts that must then be assembled into a finished product that additive manufacturing can produce quicker and cheaper.
Advocates say the technology could help bring factory jobs back to the United States, a trend manufacturing gurus say has enough legs already to justify a name: reshoring. Boston Consulting Group says reshoring could create 2.5 million to 5 million U.S. manufacturing jobs by the end of this decade. President Barack Obama and others have based their claims of a renaissance in U.S. manufacturing on reshoring and increasing U.S. exports.
Their optimism was tempered by other developments last week, including Friday's news that the U.S. foreign trade deficit jumped sharply in November to $48.7 billion. The increase came even as oil prices dropped. Global Insight economist Gregory Daco expects the deficit means the U.S. economy grew at an inflation-adjusted pace of less than 1 percent in the fourth quarter.
One economist who examined Friday's numbers has come to a starkly different assessment than those who are heralding a manufacturing renaissance.
Alan Tonelson of the U.S. Business and Industry Council said the low lights of Friday's report included record monthly trade deficits for manufacturing and high-tech products. He said November's manufacturing trade deficit -- the difference between imports and exports -- topped $66 billion.
That marked the third time a new monthly record in the category has been achieved since August, according to Mr. Tonelson, who has consistently been skeptical of the manufacturing renaissance point of view.
The November trade deficit for high-tech products approached $11.8 billion, topping the old record of $10.9 billion set in November 2011.
"The manufacturing renaissance people seem to be relying very heavily on anecdotes," Mr. Tonelson said. "But when you look at the best data we have available, this manufacturing renaissance so far is nowhere to be seen. In fact, most of the data [show] more and more slippage against foreign rivals."
Mr. Tonelson said talk of a manufacturing revival belies the fact that U.S. manufacturers who make and export technologically advanced products have been steadily losing ground to foreign competitors.
Based on analysis Mr. Tonelson distributed Wednesday, imports captured nearly 38 percent of the $2 trillion U.S. market in 2011 for 106 types of sophisticated goods, including semiconductors, turbines, construction equipment and farm machinery. That's up from 37 percent in 2010 and 24 percent in 1997, when the government began providing data on the products.
The figures are significant in that economists, businesses and policymakers pin much of their hopes for U.S. manufacturing on plants that make high-tech goods, not the clothing, shoes and other low-value products that have disappeared from the U.S. manufacturing landscape.
High-end manufacturers "seem to be facing the same kind of pressures that doomed their lower value counterparts," Mr. Tonelson said. He said high-value products account for more than half of China's exports.
Boston Consulting and others optimistic about the prospects for reshoring say several factors support the trend. Those include rising wage rates in China, which they say is already eroding the country's low cost advantage in some areas.
Another contributing factor is a rise in the value of China's currency -- not big enough of a move to suit Mr. Tonelson -- that makes their exports more expensive. Higher shipping costs and concerns about supply chains being interrupted by political unrest also support the trend.
Boston Consulting believes one development that could threaten its forecasted resurgence in U.S. manufacturing is a shortage of skilled workers. Senior partner Harold Sirkin said worker training efforts must be intensified, "but there's little reason to believe that the United States cannot remain on track for a manufacturing renaissance by 2020."
An October report by an economist with Canada's TD Bank identified computers and electronics, machinery, fabricated metals, electrical equipment, and plastics and rubber as industries that could lead the reshoring trend. More labor-intensive industries such as apparel and textiles will stay offshore, the report said.
However, the report tempered those hopes with an assessment shared by other economists: that reshoring, additive manufacturing and other promising developments won't bring back all the 2.3 million manufacturing jobs obliterated by the Great Recession any time soon -- if ever. Productivity advancements that allow manufacturers to produce more with fewer workers are one reason why they believe that will be the case.mobilehome - businessnews - bizopinion
Len Boselovic: email@example.com or 412-263-1941.