The U.S. manufacturing industry had a strong year in 2022, with output rising more than expected and productivity increasing significantly. This was due to a combination of factors, including the continued growth of the economy, new technology investments, and the recovery from the Covid-19 pandemic.
What Manufacturing Industry Analysts Observed
In October 2022, GBQ hosted its annual Manufacturing & Distribution Industry Update, featuring an array of industry experts who shared their insights on the state of the industry. They discussed how Covid-19 had impacted the sector and what strategies could be implemented to ensure future success.
The U.S. manufacturing output rose 4.7% from a year earlier in September 2022 and was 3.5% above its level in the fourth quarter of 2021. This was primarily driven by increased demand for consumer goods and investment in new technology, such as robotics and automation, allowing greater efficiency and productivity gains.
Manufacturing USA released its 2022 Highlights Report, highlighting some of the innovative technologies developed at its institutes around the country that are helping to drive industry-changing results from the collaboration between businesses, universities, and government agencies. These include advanced materials development, additive manufacturing, digital twins for product design optimization, and artificial intelligence (A.I.) applications for predictive maintenance and quality control processes.
Predictions Heading Into 2022
Deloitte’s 2022 Manufacturing Industry Outlook reported that despite some lingering effects from Covid-19, favorable economic indicators paired with historical labor and supply chain challenges would shape U.S. manufacturing in 2022 and beyond. The report also noted that manufacturers should focus on developing strategies to address these challenges while taking advantage of opportunities presented by digital transformation initiatives such as Industry 4.0 technologies like A.I./machine learning (ML), Internet of Things (IoT), cloud computing, virtual reality (V.R.), augmented reality (A.R.), blockchain technology, 5G networks, etc., which can help them become more agile and competitive in today’s global market environment.
Overall industrial production rose 0.4% in December 2022, according to data from The Federal Reserve Board’s Industrial Production & Capacity Utilization report, which showed that manufacturing output fell 1.3%. Despite this decline, however, it is clear that U.S. manufacturers have made significant progress over the past year thanks to investments in new technology as well as increased demand for consumer goods during this period of economic recovery following Covid-19 restrictions being lifted across many parts of the country throughout 2020-2022 period..
Looking ahead into 2023, U.S. manufacturers will likely continue to benefit from technological advancements such as AI/ML applications for predictive maintenance processes and increased demand for consumer goods due to continued economic growth throughout 2021-2023. It is also vital for businesses to stay abreast of changing regulations related to environmental protection, labor laws, trade policies, Etc., so they can remain competitive while ensuring compliance with all applicable laws.
U.S. manufacturers have made great strides over the past year thanks to investments in new technologies, increased demand for consumer goods, and recovery from the Covid-19 pandemic.
As you plan your 2023 and 2024 goals, and as you consider an investment in new manufacturing technology or replacing older, less efficient equipment, connect with an ENGS representative to learn how we can help you move your business forward with attractive financing for industrial equipment as well as working capital and insurance products designed for manufacturing businesses.