Expert: Manufacturing is ‘sleeping giant’ that will help U.S. thrive

The nation’s manufacturing industry is a “sleeping giant” that will continue to grow, help our economy advance and help local communities thrive. It will also face challenges and changing times. Those are the views Ed Youdell, president and CEO of the Fabricators and Manufacturers Association (FMA), shared with a Quad Cities crowd Thursday, Sept. 5. […]

The nation’s manufacturing industry is a “sleeping giant” that will continue to grow, help our economy advance and help local communities thrive. It will also face challenges and changing times. Those are the views Ed Youdell, president and CEO of the Fabricators and Manufacturers Association (FMA), shared with a Quad Cities crowd Thursday, Sept. 5. Mr. Youdell gave the morning keynote speech to kick-off The Manufacturing Conference, a first-time event hosted by the QCBJ at the Bend XPO on East Moline’s riverfront. (The FMA is a professional association serving both company and individual members in the metal processing, forming and fabricating industries.) The conference, which attracted more than 200 people from the business community, was presented by the Corridor Media Group, the parent company of the Quad Cities Regional Business Journal and its sister publication, Corridor Business Journal, based in North Liberty, Iowa. The crowd included manufacturers and other related business leaders from the Quad Cities region as well as the Iowa City-Cedar Rapids corridor. This year’s annual event was made possible by these sponsors: Platinum sponsor – Eastern Iowa Community Colleges; Gold sponsors – John Deere, Iowa Association of Business and Industry; and Silver sponsors – Baker Group, Frontier Co-op, Shive-Hattery Architecture & Engineering and ALM Positioners.  During a brief presentation and question-and-answer session, Mr. Youdell talked about the current state of the manufacturing economy, factors impacting the economy and some predictions for the future. One of the key points he made is that investing in manufacturing will yield big rewards. He said that every dollar invested will yield $1.84. “That’s how you build communities. … We are not competing with manufacturing down the street any more. We are competing globally,” he said. He added that many people still underestimate the importance of manufacturing on the economy. He called it the “sleeping giant of industries” that continues to drive the U.S. economy forward. Here are some of the FMA’s manufacturing statistics that Mr. Youdell presented during his keynote:

• Manufacturing accounts for 10.7% of the U.S. economy, about $2.5 trillion. It employs about 9% of the workforce.
• The U.S. accounts for 18% of manufacturing value in the world. China accounts for about 30% and dominates consumer goods. The U.S. dominates in high-value goods such as airplanes, machinery and robotics.
• The U.S. exports $1.4 trillion a year in manufactured goods. The dominant export from the U.S. is food, but second is high-level manufacturing and machinery.
• In Iowa, manufacturing employs about 230,000 people. The average compensation for the jobs are $80,000 a year. Also, 17% of Iowa’s GDP is generated by manufacturing. Manufacturing also employs about 17% of the state’s private workforce.
• In Illinois, 557,000 people are directly employed in manufacturing. The average compensation was about $98,000 a year, as of 2021. Manufacturing accounts for 9.4% of the workforce and 12.8% of the state’s output.

He added that some sectors are experiencing a slowdown in manufacturing after “three years of record growth” following the pandemic year of 2020.  During the question-and-answer session, Mr. Youdell was asked about John Deere's recent economic slowdown and layoffs. He told the crowd he felt unqualified to answer a question about Deere, but added: “We all live in a demand environment. If demand is down, that changes decisions.” Many economists have stated that decreased “demand” has been spurred by the lower crop prices that have hit the nation’s farmers. Part of his presentation seemed to address part of that situation. A section labeled “Looking Forward” showed information on crop prices decreasing. For instance, corn prices are down nearly 19% year to date; soybeans are down about 13%; and wheat prices are down about 14%. “Increased output will create strong demand for equipment/maintenance, but lower selling prices will affect farmers’ ability to invest and take on more risk,” according to the informational slide presented to conference’s attendees.  While this slowdown is frustrating, Mr. Youdell predicts continued growth in the coming years.  Some of those predictions of growth include an FMA forecast of a 2% growth of the gross domestic product (GDP) in the U.S. next year; predictions by Goldman Sachs that interest rates will continue to fall in 2025; and many companies having fewer problems in finding qualified employees. However, the workforce continues to be a major worry for many employers in the manufacturing field. A recent FMA report states that most manufacturers reported that building a robust and trained workforce as a key area for investment. Mr. Youdell said that education continues to be a key factor in preparing a great workforce for manufacturing. He told the crowd that when he was a young man, it was common for  people to walk in the doors of many manufacturers and immediately get an entry-level position, such as sweeping the floors. But times have changed. “Today, you better have some skills when you walk in that door,” he added. In another topic brought up in the question-and-answer session, Mr. Youdell was asked about what policy changes he would like to see the next presidential administration tackle. He said reducing inflation should be a topic priority. “Addressing inflation is where I would start,” he added. Several people in the audience liked what they heard from the FMA leader. One of those audience members was Holly Katko, CEO of  U-Connect, Inc. (That company provides a wide variety of services for businesses. Some of them include finding health insurance for small groups, and many types of business training.) Ms. Katko said she was especially interested in hearing the comments about John Deere because she has family members who farm in the Durant, Iowa, area. She said a big part of the problem facing the ag-equipment giant is due to many farmers – like her family members – are dealing with very low crop prices. Because of this, they are not in a position to spend money to buy new farm equipment. “You can’t make it unless you are a really big farmer,” she added.