A report proclaims the manufacturing “renaissance” a hoax, and the national media follow suit

By Bart Taylor | Jan 19, 2015

Last week manufacturing was in the national news as a new report called into question the health of the sector. It's an ongoing debate in business circles: is manufacturing enjoying a true comeback, or not?

The source was the Information Technology and Innovation Foundation (ITIF), and a report entitled The Myth of America's Manufacturing Renaissance: The Real State of U.S. Manufacturing.

ITIF throws water on any talk of a "renaissance," arguing that since manufacturing hasn't fully recovered to its previous employment and GDP levels and is growing more slowly than the broader economy, "U.S. manufacturing is shown to be in state of moderate, cyclical growth, and not," the report emphasized, "experiencing a renaissance." And further, any efforts to influence the "debate on U.S. manufacturing should not be informed . . . with an agenda of keeping bad news from dampening support for further global integration."

Yahoo Finance, The Guardian, Barron's, and CNBC ran with the story, parroting ITIF's conclusion and calling into question its own previous reporting, with headlines like U.S. manufacturing comeback: Nice story...if only it were true and New study paints bleak picture of manufacturing rebound. CNBC seemed annoyed, Is that nice story about the return of "Made in America" simply made-up?

Is ITIF correct? And did the media get it right?

As we've chronicled, manufacturing employment and GDP reached all-times lows in the late 2000's. Consider the recent arc of U.S. manufacturing, as The Atlantic described in 2011:

Manufacturing jobs peaked in 1979 at 19.6 million. They drifted down slowly for the next 20 years -- over that span, the impact of offshoring and the steady adoption of labor-saving technologies was nearly offset by rising demand and the continual introduction of new goods made in America. But since 2000, these jobs have fallen precipitously. The country lost factory jobs seven times faster between 2000 and 2010 than it did between 1980 and 2000. Until very recently, this trend looked inexorable -- and the significance of the much-vaunted increase in manufacturing jobs since the depths of the recession seemed easy to dismiss. Only 500,000 factory jobs were created between their low, in January 2010, and September 2012 -- a tiny fraction of the almost 6 million that were lost in the aughts.

Six million jobs lost in the 2000s and not as many created since.

But a renaissance, a comeback, would be measured on progress since reaching the low point, and in this context, data indicate a sector with considerable momentum as of late. As the L.A. Times noted, "Since February 2010, U.S. manufacturing employment has increased at a rate of 6.7 percent, with some Midwestern and Southern states such as Indiana and South Carolina seeing gains of 15 percent or more." Colorado's a bright spot. Jobs are still being offshored, but as ITIF (and The Atlantic) notes, as many are on their way back.

Money is also flowing back into the sector in the form of federal R&D funding, and business capital: Forbes recently noted that a new technology-powered supply chain is increasingly catching the eye of investors. And improving economics of making things in the U.S. is just one of several powerful national and regional trends now favoring U.S. manufacturing.

The media's headline writers would have also benefitted from looking more closely at the source. ITIF's agenda (or at least the author's), its advocacy of "global integration," puts it at odds with manufacturing from the get-go. For many, 'globalization' is just a catchword for 'offshore jobs.' It would be hard to see ITIF projecting manufacturing job growth. ITIF may be a credible source; it's also a biased one.

It's noteworthy that, today, manufacturing's enjoying any good news -- 40 years of misery is a long time. And, what was offshored and disassembled can't be rebuilt overnight. ITIF may also miss the more profound trends that may influence the sectors resurgence -- more than the cost of Chinese labor or domestic energy. Here and in other places, manufacturing is also broader-based than at any time in recent history.

Manufacturing is coming back -- but it's changed. The goalposts have moved. The question is: to where?

That's probably a better story for the media anyway.