Uncertain return of US manufacturing dominance

Mon, 08/19/2024

by Ellie LeTu

Source: Financial Times

• The US is a country built on manufacturing

  • Produced more steel, cars, and consumer goods than any country.

  • Peaked in 1979 where one in five Americans worked in manufacturing.

• Manufacturing has been on the decline in the USA

  • Outsourcing to Asia has cost millions of Americans jobs.

  • China became world’s largest manufacturer in 2010.

• Joe Biden’s push to revitalize manufacturing

  • Inflation Reduction Act: Clean Energy.

  • CHIPS Act: Semiconductor industry.

• Plenty of setbacks

  • 40% of the manufacturing investments have been delayed or paused indefinitely.

  • Competition from China has driven prices for products like solar panels very low, rendering some projects not economically possible.

• Uncertain future

  • McKinsey estimates the semiconductor industry faces a shortage of 59K - 146K workers by 2029.

  • High interest rates, high inflation, and collapse in pricing for this new technology has made investors more uneasy backing these projects.