Providence Journal: American manufacturing is doing quite well these days, although you'd never know it by all those factory layoffs and the dearth of made-in-USA labels at the store. But U.S. manufacturing is indeed strong, and Americans should understand why.
Industrial production rose 0.9 percent in June, the biggest increase since early 2004. The Federal Reserve's index of manufacturing production is now 3 percent higher than it was at the top of the last economic boom.
Yet factory employment remains in the dumps. There are now 1.6 million fewer American factory workers than there were in November 2001, when the current economic recovery first got going.
What's happened is that American manufacturers have learned to put out more stuff with fewer people. Labor intensive industries, such as textiles, will continue moving factories to low-wage countries. But manufacturing processes that require only a few skilled workers operating sophisticated machinery are still here and thriving. And strong global demand for the products they make is certainly helping.
Many Americans are unaware of the healthy state of American manufacturing because the United States no longer makes the kind of products found on the shelves at Wal-Mart. Shirts, shoes and radios most likely come from places like China, Brazil and the Philippines. But capital equipment -- machines used to make other goods, such as tractors, loading machines or generators -- is still being made in the United States and selling well.
Boeing is doing a brisk business making aerospace products and U.S. automakers are near full production. We should note that managers of foreign car companies, such as Hyundai, also think that they can produce competitive vehicles on U.S. soil and continue building new facilities here.
The horizon for American manufacturing is not without clouds. The dollar has been strengthening, which makes U.S. products more expensive in other countries. Rising medical costs are also handicapping American manufacturers. That's just one more reason why America needs a coherent system of delivering health care.
But it's clearly not true that Americans don't make things anymore. Again, they're not making the sneakers, computer games and the other consumer products we throw into our shopping carts.