Bank of the West reveals opportunities, challenges for small, midsized U.S. manufacturers

Bank of the West, San Francisco, has announced the publication of "Made Here: The Business Outlook for U.S. Manufacturing," written by the bank's Chief Economist Dr. Scott Anderson. The paper highlights the bright economic outlook for small to midsized U.S. manufacturers, the challenges they face, and how their proximity to U.S. customers is fueling the American manufacturing revival and providing a strong competitive advantage over overseas manufacturers.

Various economic factors have contributed to a resurgence in U.S. manufacturing, including greater access to credit, rising labor costs overseas, and productivity improvements in the U.S. The result is that manufacturing output per U.S. employee hour has more than doubled over the past two decades. The manufacturing sector now has a strong long-term outlook with a rapidly shrinking cost differential between overseas manufacturers such as China, a chief competitor.

The manufacturing sector currently faces key short-term economic challenges: The strong U.S. dollar, the plunge in crude oil prices, and a hard winter drove a modest manufacturing slowdown. U.S. manufacturers also face safety and environment regulations, high corporate tax rates, and a talent crunch versus overseas competitors. However, despite the relatively high costs associated with regulations, taxes, and labor, the U.S. manufacturing sector is showing healthy growth. Seven years after the economic crisis, U.S. manufacturers now are outperforming the economy overall.

To read the full paper, visit gowe.st/mfg1.