The effect the economy has on the manufacturing industry

Friday, September 30, 2016

President, APEC,

Global and regional economies have been intimately linked to the manufacturing industry throughout history, influencing each other in profound ways. Let's take a look at the past, present, and future of manufacturing to find out more about this delicate relationship.

Past Effects

The nations which hold the greatest power have always been the same nations that produced and controlled the bulk of the world’s goods. Think of the Chinese Empire and its manufacturing of arms, the Roman Empire and its manufacturing of building materials, and the British Empire and its manufacturing of ships. Each of these empires gained great wealth and control due to their strong innovation and manufacturing capabilities.

In the more recent past, the industrial revolution was spurred on by the invention of a technique for creating steel. Massive iron ore deposits in the United States were discovered and used to create thousands of bridges, railroads, skyscrapers, and engines, resulting in millions of jobs. This one manufacturing discovery catapulted the US into becoming one of the world’s biggest economies.

When the Great Depression hit, demand for manufactured goods stalled, therefore putting millions of people out of work which, in turn, decreased the demand for goods even more.

Again, when the Great Recession of 2008 hit, millions of Americans working in the manufacturing industry lost their jobs. This time, however, when workers were laid off, massive job losses indicated superior productivity by a company rather than the opposite.

Present Effects

Just as England, The United States, Germany, and Japan rose into power during the 19th century due to the positive economic side effects of industrialization, countries such as China, Mexico, Brazil, South Africa, and India are now experiencing an economic revolution and its correlating rise in standard of living thanks to these nation’s ever-increasing manufacturing capabilities.

For the present time in the United States, as the economy continues to recover from the Great Recession, manufacturing is once again accelerating and more employees are getting hired. However, specialization is often required to keep up with the new economy’s attitudes and expectations. Consumers are demanding innovation, customization, and variation at ever-increasing rates.

Future Effects

As the economies continue to shift and mature, the manufacturing industry will need to shift and mature along with it. If manufacturers fail to evolve and compete on a global scale, they may just get left behind, resulting in the closing of doors of more and more homegrown companies.

One approach to insulating the industry from both predictable and unpredictable economic fluctuations is by continually improving the efficiency of processing equipment and techniques.

Improved manufacturing equipment and processes often result in the following benefits:

    Increased uptime
    Reduced downtime
    Improved formula control
    Upgraded traceability
    Integrated automation in processing systems

By investing in these approaches, the manufacturing industry will be better equipped to cope with whatever economic changes come along while simultaneously increasing profits.