2017 US Manufacturing & Industrial Digital Marketing Review
As the sun sets on 2017 we review what the year brought for U.S. Manufacturing in general and Industrial Digital Marketing in particular. Why? To review where we are now, what's going well (and not so well) in order to help you create better plans for 2018!
ISM report economic activity in manufacturing expanded, in November, for the 15th consecutive month led by expansion in new orders and production. This is good news, a reading above 50% indicates the manufacturing economy is generally expanding; below 50% that it is generally contracting. Their commentary: "expanding business conditions, with New Orders and Production leading gains, Employment expanding at a slower rate, Order Backlogs stable and expanding, and Export Orders all continuing to grow in November."
Dollar and Oil
In 2017 the dollar has steadily declined by 8% against a basket of G10 currencies. At the same time, the global economy is on pace to post its best growth year since 2011 (ref: IMF). Considering these two factors together, it's not surprising that U.S. exports were up 8% in the first half of 2017 compared with the same period in 2016. Meanwhile, as 2017 has wound on, crude oil has increased to within a few bucks of $60 a gallon. This is good news and bad news, a weaker dollar of course helps manufacturing exporters but hurts raw material importers and higher oil prices increase transport costs. As 2018 approaches, the prospect of interest rate increases and tax cuts haven't (yet at least) made the dollar more attractive and as the oil price has climbed more US fracking has become profitable so keeping the oil price in check.
Employment and Wages
In November unemployment for manufacturing workers hit 2.6% (a new record and the first time under 3%) and 31,000 jobs were added in the manufacturing sector. So far this year the US has added 138,000 manufacturing jobs, far better than the 34,000 factory jobs lost over the same period last year. Manufacturing hiring has been particular strong in metals and electronic products which have added 32,000 jobs and 13,000 jobs respectively. In total across all non-farm payrolls 228,000 jobs were created and the economy has added jobs for 85 consecutive months, the longest streak in recorded U.S. history! On wages, a "pedestrian" 2.5% average hourly earnings growth left many scratching their heads about how the lowest overall unemployment rate (4.1%) in 17 years still isn't producing fatter paychecks. However, wage increases in manufacturing are well ahead of that overall average - according to the Dept. of Labor Statistics, annual unit labor costs in manufacturing increased 4.8 percent in Q3 2017.
Productivity and Costs
According to the Dept. of Labor Statisticsnon-farm business sector labor productivity increased 3.0 percent in Q3 2017. The good news is that this overall non-farm productivity increase was the largest since Q3 2014 (4.4%) but the bad news is that in the manufacturing sector labor productivity fell 4.4% in Q3 2017, as output decreased 1.1% and hours worked increased 3.5%. This was the largest quarterly decline since -5.4% in Q4 2008. Over the last four quarters, total manufacturing sector productivity increased 0.3 percent, as output increased 1.5% and hours worked increased 1.2%.
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- BSMART - Upgrading Manufacturing SEO and Content Marketing
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eCommerce adoption and success continues to accelerate in manufacturing with many leading suppliers achieving significant percentages (some >50%) of their revenue online. We've written many times on the topic of eCommerce progress in manufacturing this year, for example, see these 5 posts:
- 4 Ways To Keep Up (or Get Ahead) in Industrial B2B eCommerce
- Is It Time To Drop The 'e' In B2B eCommerce?
- How Has B2B eCommerce Buyer Behavior Changed In 2017?
- US Manufacturing Production Up, eCommerce Up Even More!
- What Will 2017 eCommerce Growth Be For Industrial Suppliers?
CAD Model Downloads
For certain industrial suppliers (manufacturers and distributors) CAD Model downloads are a key part of their digital marketing because they are the best type of online content for lead generation! Try CAD model viewing and download for yourself by clicking on the Grainger page image above. What other content type can give suppliers 50% conversion rates to sales? We've written about this topic extensively in 2017, for example see this cluster of posts:
- Manufacturing Engineers Download Over 52 CAD Models per Year
- 8 Ways to Radically Increase Industrial Marketing ROI With CAD
- CAD Email Marketing - 3 Prerequisites and How To Use It Well!
- The Complete A-Z Guide to Industrial B2B Marketing With Online CAD
- Do You Know When and How To Use CAD to Grow Business?
- Manufacturing Marketing Institute Podcast on CAD Models
- Replacing Outdated B2B CAD Marketing Tech in Manufacturing
US manufacturing has been considered a victim of globalization and automation. But that sentiment seems to be shifting as US companies have understood that with the appropriate automation technology US manufacturing is coming back as a sustainable, feasible activity. This study 'The Myth and the Reality of Manufacturing in America' estimates that 87% of manufacturing jobs lost between 2000 and 2010 were attributed to automation and improved efficiency. Our view is that automation is inevitable so US manufacturing must embrace it, invest in it and retrain workers. To help we've written about Automation's progress in particular areas including Online Configuration, IIOT and 3D Printing, for example, see these 5 posts:
- Why Is Interactive Content An Industrial Growth Opportunity?
- Industrial Internet of Things Use is Accelerating Fast - Is yours?
- 3D Printing Of Metal Parts Is Now Mainstream!
- Allow 3D Printing For Prototyping But Not Manufacturing!
- How to Add 2D and 3D CAD to Your Product Configurator
As 2017 closes we have a healthy US economy and an improving world economy - collectively they are increasing demand for US manufactured products! But we have a complex and changing business environment to work in as the above review illustrates. As you prepare your 2018 plans perhaps remember what Bill Gates, once said, “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency!"
Compliments of the season to you and yours and we hope the above review material helps you prepare for 2018. As always, please add a comment below or, if you'd like our opinion on your 2018 plans, call us or click either button below: