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KSM Blog | Katz, Sapper & Miller CPA

Macro Manufacturing: Global Picture Shows Industry Landscape Shifting

Posted 5:05 PM by

Sometimes it’s helpful to take a step back and look at the big picture. We’ve come a long way since the recession hit the United States in late 2007. And let’s not forget that we were far from the only country affected. The New York Times provides a good snapshot of how the global manufacturing landscape looks today as compared to pre-recession levels in “Global Industrial Production Shakes Off 2007 Doldrums.”

The charts below show Industrial production levels, a measure including all manufacturing except construction, from the beginning of the recession until now.

Key takeaways:

  1. Globally, industrial production levels have recovered and are up 12% from pre-recession levels (excludes construction).
  2. Emerging economies are leading the charge in increased industrial production (up 34%), led by China (up 50%) and India (up 25%).
  3. Advanced economies are down 5% from pre-recession levels of industrial production.
  4. U.S. levels of industrial production have grown past pre-recession levels, which is unique among developed countries.

In a flat world, manufacturing is a global industry where cost of inputs and labor are a major factor in how competitive a nation or region can be. The United States has outperformed all other advanced economies since 2007. However, emerging countries, particularly China and India, continue to capture much of the growth in global production.

One of the strengths in manufacturing growth has been in the automotive industry, which provides many jobs in the United States for both domestic and foreign car brands. This area of growth will be important for Hoosiers and is already driving an uptick in shipments from ports on Lake Michigan, according to a report by the Indianapolis Business Journal, “Steel demand feeds shipping boom in Indiana.” Additional evidence of growth can be found in recent jobs announcements by Tenneco Inc., Toyota and GM.

So while the growth outlook is positive for manufacturing in the United States, the global picture shows a shifting landscape towards manufacturing in emerging markets. As a state and a nation, let’s stay hungry.

About the Author
Jon Nix is a member of Katz, Sapper & Miller’s Audit and Assurance Services Department. Jon audits and reviews financial statements, and he advises clients on accounting, reporting, compliance and internal control matters. Connect with him on LinkedIn.


 
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