Ahead of Today’s PMI Report — U.S. Manufacturing Continues to Slip

The March PMI consensus estimate calls for a slight drop to 54, which indicates that expansion is continuing, but the problem remains that more businesses are closing than are opening. Job numbers have grown by 500,000 in manufacturing since early 2010, surely a good sign. However, the Wall Street Journal notes that 5.7 million manufacturing jobs fled the United States in the decade from 2000 to 2010.

One way to gauge the success of U.S. manufacturing is how much the country exports. And the answer there is “not enough.” While growth in manufacturing jobs has pumped some life into the U.S. economy lately, exports have improved modestly at best. From January 2012 to January 2013, exports of goods have risen by about $2 billion, following a rise of about $8.5 billion in the months between January 2011 and January 2012.

The Wall Street Journal also notes that the phenomenon known as “reshoring,” that is, manufacturing jobs coming back to the U.S., has yielded just 50,000 jobs since 2010. For reshoring to make a difference, that number has to rise much higher and much faster.

While today’s report on PMI is expected to show continued expansion in the U.S. economy, that expansion does not amount to a substantial, fundamental change.