For most, 2015 went out with the bang of fireworks and the clinking of champagne glasses. For the manufacturing sector, 2015 ended with a whimper, at its lowest point in more than six years. This massive contraction of factories both in the U.S. and abroad has left forecasters wondering if the manufacturing sector will be able to recover this time.
The primary factor for the shrinking of the global manufacturing sector is an overall weakness in the industry. Global demand for many products produced in the affected factories has dropped, and those products that are still in demand are being sought at lower prices than ever before.
China’s manufacturing sector contractedin the latter part of 2015, with December being the fifth month in a row of a steady decline.
In the United States, 10 of 18 manufacturing industries contracted to some degree toward the end of 2015.
The only market that really expanded during 2015 was the European manufacturing sector. All of the European nations experienced some form of expansion, which is fantastic news for countries such as Greece who have faced recent and drastic economic hardship.
Another factor that may be contributing to the sales drop in the manufacturing sector is purchaser stockpiling. Companies are buying large stockpiles of the components and materials they are assembling or selling, and keeping a lot on hand instead of relying on smaller, more constant orders.
While it’s a great way to save some money in the long run, the number of purchasers that are currently using a stockpile-sales model are having a negative effect on the manufacturing sector.
Manufacturing used to be a great career for anyone with a decent work ethic. You could start in a manufacturing job right out of high school, climb the ladder, and make a very good life for yourself and eventually your family.
The job market in the manufacturing sector has been slowly shrinking since the 1980s due to the increase in outsourcing and automation, but the 2000s have been the worst in terms of employment loss and slow growth.
Between 2010 and 2015, barely a million jobs have been created in the manufacturing sector, and almost none have appeared since the beginning of 2015.
Room for Improvement
So, can the manufacturing sector recover from this seemingly endless slump?
The short answer is yes. There are still many uses for manufactured equipment in many different fields, and many of these uses currently have no viable replacement or alternative.
The key to successfully reviving the manufacturing sector is technology. Technological advances, once seen as the bane of the common manufacturer, are going to be the thing that helps bring this ailing industry back to life.
Right now, there are three key factors that – if used properly – can help reinvigorate the manufacturing sector:
Crowdsourcing - Crowdsourcing isn’t just for funding anymore. Even NASA has started to use the power of the crowd to discover things that may elude their scientists. Crowdsourced R&D is starting to become more popular, especially since it’s effectively free.
The Internet – Instant connectivity between machines and manufacturing devices allows them to work much more efficiently, and also helps to prevent costly repairs by sensing breakdowns and other errors before they occur.
Advanced Manufacturing Techniques – 3D printing took the world by storm when it first entered the private sector with small, affordable home printers. Instead of turning their backs on advanced techniques like 3-D printing, manufacturing companies need to embrace these new techniques or risk being left behind.
Manufacturing isn’t dead yet, but it will have to adapt to the times in order to survive the technological revolution that is sweeping over it. There is still a great call for manufactured equipment and products, but if these companies continue to stick to their antiquated manufacturing techniques, they will be left behind.