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America’s Manufacturing Sector Continues to Show Momentum, With New Data Monday Showing Manufacturing Growing at Fastest Pace Since Early 2011:
09:49 AM EST
A core component of President Obama’s agenda to grow the middle class is to make the U.S. a magnet for the location of high-quality jobs – especially those that support manufacturing and innovation.
The President has already taken significant steps to support America’s manufacturers, including by announcing nearly $250 million in funding to support four new manufacturing innovation institutes, aggressive new efforts to enforce trade agreements and open new markets, new investments in community colleges to help workers get the high-demand advanced manufacturing credentials needed by our manufacturers, and launching the first-ever federal effort to bring job-creating foreign investment to the U.S.
And going forward, the President will continue to push a comprehensive agenda to support a manufacturing renaissance that includes supporting a network of up to 45 manufacturing innovation institutes with a one-time $3 billion investment, making the U.S. more cost competitive by reforming our business tax code including a rate no higher than 25% for manufacturing, expanding and making permanent the R&D tax credit, continuing to ensure that trading partners like China are playing by the rules, and pushing new efforts to train workers for the jobs of today and tomorrow.
Our emphasis on manufacturing is due to the unique role that the sector plays in creating positive “spillover” benefits to our broader economy, particularly in its connection to our ability to innovate. Manufacturing punches above its weight; despite representing 12 percent of GDP, manufacturing accounts for roughly 70 percent of private sector research and development, 60 percent of all US R&D employees, over 90 percent of patents issued, and the majority of all U.S. exports. The benefits from a stronger manufacturing sector go far beyond factory jobs and include the production capabilities needed in design and innovation for many technologies, the high-skill talent that enable our services industries, and the dense web of suppliers that employ millions outside of the manufacturing sector.
While our emphasis on manufacturing must have a long-term focus – one that goes beyond the ups and downs in our economy in any month or quarter – today we received more good news that growth in America’s manufacturing sector continues to be strong.
On Monday, ISM released its monthly purchasing managers’ index (PMI), which rose to 57.3 in November – the fastest monthly pace of growth since April 2011, with all five components of the index showing strength, including employment (a reading above 50 indicates expansion). he index has shown sector expansion for six straight months and is on track to have its strongest quarter since mid-2011. Recent strength in the ISM report underscores that America’s manufacturing sector is helping to lead our recovery. Today there is little disagreement that the U.S. is a more competitive location for production, and we are beginning to see the results. America’s manufactures have created jobs at the fastest pace in 15 years, with over 500,000 new jobs added since February 2010, and our manufacturing sector has grown roughly twice as fast as the overall economy since the beginning of 2010. And there is little doubt that without the threat of default and harm from the arbitrary sequester, America’s manufacturing sector and the economy would be performing even better today.
We believe that if we make the right policy choices we can support a manufacturing renaissance. That’s why the President continues to push forward on his long-term manufacturing agenda.
In the coming weeks, the President will announce the winners of three new manufacturing innovation institutes, each one a team of businesses and universities coming together to co-invest in the development of different manufacturing technologies to enable U.S. leadership in new products and processes, supported by a federal investment of $200 million led by the Departments of Defense and Energy. This announcement demonstrates progress on the President’s broader push to fund up to 45 institutes for $3 billion.
And this week we will have two important events at the White House, bringing together leaders from business, academia and labor as well as mayors from some of America’s leading manufacturing cities to discuss how we can build on our shared progress.
On Tuesday, December 3rd, we will host the first convening of the President’s re-launched Advanced Manufacturing Partnership (AMP) Steering Committee. 2.0. The President created AMP in 2011 with the recognition that industry, academia, and government must work in partnership to revitalize our manufacturing sector. AMP, which is chaired by Andrew Liveris, CEO of the Dow Chemical Company, and Rafael Reif, President of MIT, will work closely with the Administration to scale promising manufacturing workforce innovations and partnerships, and identify new, concrete strategies for securing the Nation’s competitive advantage in transformative early-stage technologies. Joining the co-chairs – in addition to myself, Commerce Secretary Penny Pritzker, and head of the White House Office of Science and Technology Policy Dr. John Holdren – will be other members of the AMP Steering Committee including:
- Wes Bush, Chairman, CEO and President, Northrop Grumman Corp.
- David Cote, Chairman and CEO, Honeywell
- Kenneth Ender, President, Harper College
- Leo Gerard, International President, United Steelworkers
- Eric Kelly, President and CEO, Overland Storage
- Klaus Kleinfeld, Chairman and CEO, Alcoa Inc.
- Annette Parker, President, South Central College
- G.P. “Bud” Peterson, President, Georgia Institute of Technology
- Luis Proenza, President, The University of Akron
- Eric Spiegel, President and CEO, Siemens Corp.
- Christie Wong Barrett, CEO, Mac Arthur Corp.
For the full membership, see our September 26th press release announcing the AMP 2.0 Steering Committee.
And on Thursday, December 5th, the Administration will bring together more than twenty mayors and local leaders from across the country to highlight locally-driven manufacturing initiatives and to identify opportunities for greater collaboration at all levels of government to ensure we’re continuing to do everything we can to support a potential manufacturing renaissance.
Today’s data shows that we are making progress but we must do even more to build on this momentum and help accelerate a resurgence in American manufacturing.