6 ms·

Has domestic manufacturing ramped up in the US since covid? Or is this purely a demand side signal of consumers tightening their purse strings?

by cwkoss 4y ago

JumpCrisscross 4y ago
> Has domestic manufacturing ramped up in the US since covid? Yes[1]. [1] https://fred.stlouisfed.org/series/IPMAN https://fred.stlouisfed.org/series/IPMAN
arcbyte 4y ago
Or it's the bullwhip effect in action in this part of the supply chain
- mindcrime 4y ago
  My money would be on this, at least for a significant portion of the effect. This kind of situation is nearly inevitable, as one can see from observing people playing the Beer Distribution Game[1]. [1]: https://en.wikipedia.org/wiki/Beer_distribution_game https://en.wikipedia.org/wiki/Beer_distribution_game
francisofascii 4y ago
Doesn't have to be consumers tightening, but rather shifting demand to non-manufactured physical products like restaurants, concerts, travel, etc.
- rightbyte 4y ago
  Ye I wonder what the shift from local consumtion to tourism etc leads to. All WFH porches are built by now. > Inbound container volumes to the US are reverting to pre-pandemic levels Does not sound too drastic.
novaRom 4y ago
Currently, some of usually luxurious types of food are in lower demand in Germany than in previous years. It's basically a choice if you will first buy necessities like meat (+80% price increase), butter (+50%), wheat flour (+100%), pasta(+100%), sunflower oil (+500%), or asparagus (-11%).
- DocTomoe 4y ago
  It is not only a demand question, supply seems also low: Usually, at this point in the year, country roads should be plastered with strawberry- and asparagus-selling stands (at least where I live). I have seen not a single one. Even if I wanted to get some asparagus, I wouldn't begin to know where to get them, as both crops when locally grown are highly seasonal and not all supermarkets carry them. As a single IT guy with a reasonably good salary, I didn't notice much of the price increases - but I do notice when stuff becomes harder to get.
  - MandieD 4y ago
    At least the supermarkets are starting to leave some items empty instead of spreading things out. How many times over the past two years did I think I'd lost my mind when I couldn't find something routine... no, I wasn't overlooking things, the supermarket employees were just trying to make it look nicer. I guess even they started to feel like this was some sort of gaslighting. "Oh, no, we're not out of dried yeast... we don't sell dried yeast!" For people on typical German IT/engineering wages, there's nothing approaching a problem getting enough to eat, or even a varied and balanced diet, but don't plan an evening around a particular recipe you don't already have all the ingredients to! Things are dicier for people like the old lady who looked to be on the verge of tears staring at artisanal canola oil in place of the 1 EUR/liter stuff she was used to buying. I'm glad I reacted to the glut of cheap strawberries from Greece this early spring by buying a couple of kilos and making jam out of them. Already stocked up my canning ingredients for wild plum season. I have a feeling there will not be short trees full of overripe fruit this year, though.
    - Sohcahtoa82 4y ago
bmitc 4y ago
> Has domestic manufacturing ramped up in the US since covid? How would that even be possible? The U.S. had very little manufacturing know-how leftover even before COVID, and now that's coupled with one of the most serious pandemics in history, political and economic turmoil if not chaos, and supply chain issues. How would a domestic manufacturing industry rise out of this? Where would people get the chips to build out the manufacturing? Of course, maybe it did ramp up (?), but I would be wholly surprised.
- corrral 4y ago
  US manufacturing has roughly doubled in inflation-adjusted dollar terms, while dropping by 30-something percent as a share of GDP (because GDP was rising much faster than that, over the same time span) since 1997. Our factories are much more productive than they used to be, so may require fewer workers, and they've not been growing as fast as e.g. services and finance, but we still have plenty.
  - bmitc 4y ago
    Is this "doubling" simply in terms of production dollars? If our factories are more productive, that's great, but I don't think it addresses my point, which is more about diversity and capability versus production numbers. Even you point out that manufacturing production has not grown with the rest of the economy. And I didn't mean to imply the U.S. has no manufacturing.
    - corrral 4y ago
      People employed in manufacturing in the US—not productivity, employees—is about the same as in 1941 just before Pearl Harbor. We had worse tech then, about the same number of people working in manufacturing, and our factories produced a tiny fraction of the output per worker that a modern factory does. IOW we should be way more capable of rapid expansion of industrial capacity than 1941 America was, and 1941 America did a pretty damn good job of it over the following few years (months, even). We do also have a lot more domestic demand than then, for multiple reasons, but again, modern factories are way more productive per worker than a factory in 1941. What could lag is specifically high tech manufacturing. A car factory or aluminum plant is one thing. A chip fab is another. That kind of extremely-high-capital-cost ultra-specialized manufacturing, we probably should have been forcing to be at least partly on-shore for security reasons, even if it caused higher prices.
coliveira 4y ago
No only it didn't ramp up, it is going down the tubes. Labor is more expensive than ever, and even at high cost there is no job pool to restart production. Parts of the US are suffering of massive draught. Interest rates are up. The stock market is down. All of this conspires to reduce industrial production, not the other way around.
- downrightmike 4y ago
  Maybe factories should get smart and build machines that build machines to reduce labor, like china is doing.
  - jmt_ 4y ago
    Factories that are behind on automation cannot simply build & develop the machines you're describing in a short amount of time. It's not nearly as simple as "oh, just make a robot to do it. duh". Maybe some companies should have been more proactive about this pre-pandemic but there are many prohibitive reasons smaller operations were unwilling to do so. The economy is more likely to stabilize before the majority of factories (that aren't already doing so) are able to automate a meaningful amount of their work.
- rossdavidh 4y ago
  Well I can say that the demand from domestic manufacturing for software support is up, confirmed from several sources, so it doesn't seem like it's "going down the tubes".
  - khuey 4y ago
    Yes domestic manufacturing is doing fine. https://www.federalreserve.gov/releases/g17/current/default.htm https://www.federalreserve.gov/releases/g17/current/default....

Has domestic manufacturing ramped up in the US since covid? Or is this purely a demand side signal of consumers tightening their purse strings?

by cwkoss 4y ago

Has domestic manufacturing ramped up in the US since covid? Or is this purely a demand side signal of consumers tightening their purse strings?

JumpCrisscross 4y ago

> Has domestic manufacturing ramped up in the US since covid? Yes[1]. [1] https://fred.stlouisfed.org/series/IPMAN https://fred.stlouisfed.org/series/IPMAN

arcbyte 4y ago

Or it's the bullwhip effect in action in this part of the supply chain

mindcrime 4y ago
My money would be on this, at least for a significant portion of the effect. This kind of situation is nearly inevitable, as one can see from observing people playing the Beer Distribution Game[1]. [1]: https://en.wikipedia.org/wiki/Beer_distribution_game https://en.wikipedia.org/wiki/Beer_distribution_game

francisofascii 4y ago

Doesn't have to be consumers tightening, but rather shifting demand to non-manufactured physical products like restaurants, concerts, travel, etc.

rightbyte 4y ago
Ye I wonder what the shift from local consumtion to tourism etc leads to. All WFH porches are built by now. > Inbound container volumes to the US are reverting to pre-pandemic levels Does not sound too drastic.

novaRom 4y ago

Currently, some of usually luxurious types of food are in lower demand in Germany than in previous years. It's basically a choice if you will first buy necessities like meat (+80% price increase), butter (+50%), wheat flour (+100%), pasta(+100%), sunflower oil (+500%), or asparagus (-11%).

DocTomoe 4y ago
It is not only a demand question, supply seems also low: Usually, at this point in the year, country roads should be plastered with strawberry- and asparagus-selling stands (at least where I live). I have seen not a single one. Even if I wanted to get some asparagus, I wouldn't begin to know where to get them, as both crops when locally grown are highly seasonal and not all supermarkets carry them. As a single IT guy with a reasonably good salary, I didn't notice much of the price increases - but I do notice when stuff becomes harder to get.
- MandieD 4y ago
  At least the supermarkets are starting to leave some items empty instead of spreading things out. How many times over the past two years did I think I'd lost my mind when I couldn't find something routine... no, I wasn't overlooking things, the supermarket employees were just trying to make it look nicer. I guess even they started to feel like this was some sort of gaslighting. "Oh, no, we're not out of dried yeast... we don't sell dried yeast!" For people on typical German IT/engineering wages, there's nothing approaching a problem getting enough to eat, or even a varied and balanced diet, but don't plan an evening around a particular recipe you don't already have all the ingredients to! Things are dicier for people like the old lady who looked to be on the verge of tears staring at artisanal canola oil in place of the 1 EUR/liter stuff she was used to buying. I'm glad I reacted to the glut of cheap strawberries from Greece this early spring by buying a couple of kilos and making jam out of them. Already stocked up my canning ingredients for wild plum season. I have a feeling there will not be short trees full of overripe fruit this year, though.
  - Sohcahtoa82 4y ago

bmitc 4y ago

> Has domestic manufacturing ramped up in the US since covid? How would that even be possible? The U.S. had very little manufacturing know-how leftover even before COVID, and now that's coupled with one of the most serious pandemics in history, political and economic turmoil if not chaos, and supply chain issues. How would a domestic manufacturing industry rise out of this? Where would people get the chips to build out the manufacturing? Of course, maybe it did ramp up (?), but I would be wholly surprised.

corrral 4y ago
US manufacturing has roughly doubled in inflation-adjusted dollar terms, while dropping by 30-something percent as a share of GDP (because GDP was rising much faster than that, over the same time span) since 1997. Our factories are much more productive than they used to be, so may require fewer workers, and they've not been growing as fast as e.g. services and finance, but we still have plenty.
- bmitc 4y ago
  Is this "doubling" simply in terms of production dollars? If our factories are more productive, that's great, but I don't think it addresses my point, which is more about diversity and capability versus production numbers. Even you point out that manufacturing production has not grown with the rest of the economy. And I didn't mean to imply the U.S. has no manufacturing.
  - corrral 4y ago
    People employed in manufacturing in the US—not productivity, employees—is about the same as in 1941 just before Pearl Harbor. We had worse tech then, about the same number of people working in manufacturing, and our factories produced a tiny fraction of the output per worker that a modern factory does. IOW we should be way more capable of rapid expansion of industrial capacity than 1941 America was, and 1941 America did a pretty damn good job of it over the following few years (months, even). We do also have a lot more domestic demand than then, for multiple reasons, but again, modern factories are way more productive per worker than a factory in 1941. What could lag is specifically high tech manufacturing. A car factory or aluminum plant is one thing. A chip fab is another. That kind of extremely-high-capital-cost ultra-specialized manufacturing, we probably should have been forcing to be at least partly on-shore for security reasons, even if it caused higher prices.

coliveira 4y ago

No only it didn't ramp up, it is going down the tubes. Labor is more expensive than ever, and even at high cost there is no job pool to restart production. Parts of the US are suffering of massive draught. Interest rates are up. The stock market is down. All of this conspires to reduce industrial production, not the other way around.

downrightmike 4y ago
Maybe factories should get smart and build machines that build machines to reduce labor, like china is doing.
- jmt_ 4y ago
  Factories that are behind on automation cannot simply build & develop the machines you're describing in a short amount of time. It's not nearly as simple as "oh, just make a robot to do it. duh". Maybe some companies should have been more proactive about this pre-pandemic but there are many prohibitive reasons smaller operations were unwilling to do so. The economy is more likely to stabilize before the majority of factories (that aren't already doing so) are able to automate a meaningful amount of their work.
rossdavidh 4y ago
Well I can say that the demand from domestic manufacturing for software support is up, confirmed from several sources, so it doesn't seem like it's "going down the tubes".
- khuey 4y ago
  Yes domestic manufacturing is doing fine. https://www.federalreserve.gov/releases/g17/current/default.htm https://www.federalreserve.gov/releases/g17/current/default....