By the time financial markets around the globe started to
tumble in October 2008, so much of the manufacturing industry was already deep
in a recession that had stretched across the better part of a decade. Millions
of workers had been sent home. Thousands of factories had been shuttered. Whole
companies just disappeared. None of it was coming back. It was gone for good.
Manufacturing was not, of course, the only industry hit hard
prior to the start of the larger recession, but perhaps no industry was
affected more since the turn of the millennium. About a quarter of a million
manufacturing jobs were lost over the course of a decade, the large majority of
them prior to 2008. As the recession spread from one industry to another,
manufacturers often still let go of the most employees.
The cycle was vicious, and it continued month after month.
How is it possible, then, that less than two years after the
economy turned, manufacturing is on the rise again? Manufacturing activity
increased again in May, according to the Supply Management’s index, the 10th
straight month of growth. And even though that growth has started to slow a
bit, growth is still growth. Were the 2008 levels just so low that any growth
is significant? Or is the sustained increase in manufacturing a sign for the
rest of the economy? Nothing is certain, but all indicators do point up,
however modest, rather than down.
“In 2009, as a result of 2008, most companies cut employees,”
says Joe B. Johnson, partner, BDO Seidman LLP. “Production lines were cut, the
average workweek went up, and a lot of companies cut capital spending. I think
capital spending is going to go up compared to 2009, and I think most of the
cost-cutting should be finished. You’re starting to see companies hire again,
so I think the indicators for 2010 have shown continued improvement there.”
