The ongoing debate about whether the US is experiencing a manufacturing renaissance heated up again this week when Goldman Sachs' chief economist, Jan Hatzius, issued a report, "The U.S. Manufacturing Renaissance: Fact or Fiction?"
Hatzius' answer is "nope."
BusinessInsider writes that in his report, Hatzius has a sober analysis of the U.S. manufacturing renaissance. “Evidence for a structural renaissance is scant so far….Measured productivity growth has been strong, but US export performance — arguably a more reliable indicator of competitiveness — remains middling at best. And at least so far, there is not much evidence for large positive spillovers from the U.S. energy cost advantage to broader manufacturing output."
Hatzius continues: “We have not yet seen a material pickup in output in the parts of the manufacturing sector that should benefit most from low natural gas prices, such as aluminum, steel, plastics, basic chemicals, and fertilizer and other agricultural products.”
Over at Time Magazine, Curious Capitalist blogger Rana Forooha raises doubts about Hatzius’downer opinion on manufacturing: “… one immediate question is whether exports really do provide a more accurate picture, as the report suggests. It may be that more goods manufactured in the U.S. are staying in the U.S. As we’ve traveled around the country reporting on this topic over the last couple of years, a number of big industrial firms have pointed to growing demand for their products here at home – Caterpillar, which makes an increasing amount of its large earth-moving equipment for domestic mining, agriculture, and energy operations, is a great case in point.