By the time financial markets around the globe started to tumble in October 2008, 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, their labor and their experience no longer needed because of more efficient machines and the rise of globalization. Thousands of factories had been shuttered. Whole companies just disappeared. None of it was coming back. It was all gone for good.
Manufacturing was not, of course, the only industry hit hard prior to the start of the larger recession. Publishing and newspapers had been on the decline for years, and the domestic automotive industry, technically under the umbrella of general manufacturing, had been in a slide for a generation. But perhaps no industry was affected more since the turn of the millennium than manufacturing. 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, millions of workers were laid off from the collective work force, but 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, not yet, but all of the indicators do point up, however modest, rather than down.
“But what we’re seeing is that manufacturing is coming back, but it’s not back yet to where it was in 2008,” says Daniel E. Berry, president and chief executive officer, MAGNET (Manufacturing Advocacy & Growth Network). “From what we hear, people are back up to 50, maybe 60, percent of their 2008 production levels and they’re feeling pretty confident but are very cautious. Manufacturers still are not calling employees back in big numbers for the most part. We are seeing some hiring again in the auto sector, so all of this is good and will have a ripple effect, but for the most part, everyone is still cautious.
“Manufacturing is recovering. It’s still a little bit wounded, but folks are feeling a little bit better — just not enough to jump in and hire back everyone they laid off.”
