I have a feeling something good's going to happen in manufacturing. Maybe not this year or next, but good times are coming.
Yes, this is an odd thing to say just days after those dreadful GDP numbers were released. Gross domestic product declined by 6.1 percent during the first quarter, the worst quarterly decline in more than half a century. Also, just hours ago Chrysler filed for bankruptcy.
Yet glimmers of hope are on the horizon. Companies continue to shed inventory, and at some point they'll need parts again to meet customer demand. Sure, consumer demand's drastically down, but we have to live, and that means we have to buy at least, some products to get by. Inventory won't last forever, right?
Have we hit bottom? I don't have a clue. Considering the banking mess we're in, maybe not. But I do believe we're one step closer to a more balanced world. Consider the big picture for a moment. The world's economic activity has been, technically speaking, enormously out of whack. We're told the U.S. economy is consumer-driven. If that's the case, most jobs in this country should be consumer-focused, be they retailers or distributors, or financial services folks who loan the consumer money so that the consumer can keep heading to those retailers.
"We are going to need fewer malls and more factories, and it"s going to be a long adjustment."
That's what Edward Leamer, director of the UCLA Anderson Forecast, an economic research group at the University of California at Los Angeles, told a reporter from the Boston Globe last month.
The Globe's article details how the economy will slowly change. China produces plenty, but its citizens don't consume enough; the U.S. used to consume plenty, but we don't make enough, and our consumption can't support the world economy like it has. Sources in the article concede that it'll take a decade or more for the world economy to balance itself out, so we're in for more pain. But over time the scale will shift back to U.S. manufacturing. And for metal fabricators stateside, that's a good thing.
It's kind of like back surgery, I suppose. It needs to be done, and the recovery will take a long, long time. And perhaps we'll always feel a little pain (the word "guaranteed pension" may become a quaint, historical term, for instance). But if we don't put ourselves under the scalpel now, eventually we'll just fall over.