According to ADP, private payrolls rose well above November 2017 estimates, with indicators pointing to steady growth that is starting to fuel capital investment, further underscoring an improving economy. (1)
And a recent McKinsey report highlights a number of US manufacturing sectors that are reversing the downward trending of recent years.
The decade ahead will reshape global manufacturing as demand grows, technology unlocks productivity gains, and companies find growth in new parts of the value chain—all of which creates an opening for US manufacturing to turn things around. After combining demand projections with an analysis of specific industry trends and historic performance, the McKinsey Global Institute finds that the United States could boost annual manufacturing value added by up to $530 billion (20 percent) over current trends by 2025. Given the importance of manufacturing to the broader economy, capturing these opportunities should be a national priority. Rather than attempting to re-create the past or preserve the status quo, the United States will need to focus on positioning its manufacturing sector to compete in the future. (2)
Over time, seeking out ever-lower bids from suppliers produces diminishing returns. Procurement can be a source of value rather than simply a place to cut costs, but this mind-set requires large firms to change incentive structures among their own purchasing teams. Large firms can benefit from identifying which of their suppliers provide critical, high-value components; these may not be the largest suppliers. Instead of just monitoring them, large firms could solicit their ideas, invest in their capabilities, and build trust to create a preferred relationship. Beyond their current suppliers, large companies also need to be engaged in strengthening the entire base of smaller manufacturers. (2)