“The glass is always half-full”, to some…
“Reality check: U.S. manufacturing jobs at 1940s levels” reads a recent headline from our friends in the financial/business media. The implication is that manufacturing is a laggard. Sad news always sells more newspapers.
Chart courtesy of Windsor Wealth with data provided by the Bureau of Labor Statistics and U.S. Bureau of Economic Analysis
Good news America! Chinese companies are opening factories in the U.S. The reality for Chinese manufacturers is that their Labor, Land and taxes are expensive; infrastructure and logistics miserable. Our lower cost of energy, abundant real estate and a willing workforce is being favorably re-assessed. Two recent transplants include a manufacturer of glass which took over an old automobile assembly plant in Dayton OH and a textile manufacturer which relocated to South Carolina. Wait! Did you say, “textile manufacturing”. Yes, Bunkie, energy and cotton are cheaper here = 3,000 new employees.
But that’s just the beginning. Look at the productivity per worker depicted by the chart. That translates into a higher standard of living, representing higher wages and ultimately, wealth for all Americans; hurray!
The chart below provided by Mckinsey&Company provides a world view of market share manufacturing concentrations. We believe that the U.S. provides manufactures a unique competitive advantage not just in the lower cost of energy but also in our culture based on fairness, entrepreneurship, rule of law and our can-do, innovative spirit.
We expect the share of U.S. manufacturing to increase steadily in the next 20 years.
The glass is half-full – celebrate!
Currently, our portfolios overweighted domestic and foreign equities.
Carlos Dominguez – Portfolio Manager, DJWMG
By James Manyika, Jeff Sinclair, Richard Dobbs, Gernot Strube, Louis Rassey, Jan Mischke, Jaana Remes, Charles Roxburgh, Katy George, David O’Halloran and Sreenivas Ramaswamy
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