Analysis: Whither U.S. manufacturing? BEA data provides clues
By James B. Kelleher
CHICAGO (Reuters) - U.S. manufacturers are pumping money into domestic operations again, according to government figures. But their outlay on machines, plants and other long-term investments has not returned to pre-recession levels and has failed to translate into a significant rebound in industrial jobs.
The figures on so-called "capex" spending from the U.S. Commerce Department's Bureau of Economic Analysis offer a glimpse of the investment priorities of a sector that some argue is poised for growth after decades of contraction.
The big takeaway: Investments in automation software and other technologies that integrate production and plant scheduling with the supply chain are high on manufacturers' wish lists. New plants and equipment? Not so much.
In many ways, the data is encouraging. Investment in fixed assets by the country's goods-producers has bounced back from the depressed levels it plunged to in 2009, according to BEA. In nominal terms, capex spending by manufacturers actually set a record last year.
In 2012, the most recent year for which data is available, manufacturers poured $416.9 billion into capex investments, BEA said, up from $389.3 billion in 2011 and $352.9 billion in 2010.
It's true: In inflation-adjusted terms, last year's investment fell short of the all-time peak of $430.6 billion set in 2008 and the $427.3 billion set in 2007.
But analysts say last year's number was still impressive, especially given the depth of the pullback in spending by manufacturers and the challenges they continue to face at home and abroad.
The recession left many companies with a huge amount of idle capacity that is only now being put back to work, and the patchiness of the global recovery has given them plenty of good excuses to postpone investing. Continued...