Lost in the remnants of a 2020 pandemic and divisive election is the uplifting story of manufacturing's ongoing U.S. comeback. We look back at 2020 this week in CompanyWeek, and one of the lessons is that American manufacturing has a chance to come all the way back from the devastation of globalization, and the lost 2000s, when the sector shed millions of jobs.
It's a bright spot in an otherwise forgettable year.
That's not to say it will look the same as when it left. The industries driving growth are food and beverage, transportation (manifest spectacularly in an EV and aerospace boom), machinery, and craft manufacturing ecosystems centered in San Francisco and other dynamic urban areas across the West. It's a far cry from the heavy industry, computer and electronics, and textile and apparel mix that once defined manufacturing.
In many growth outposts throughout the country, manufacturing is holding up better than other more high-profile sectors. In early fall of 2020, when the wreckage of the COVID-19 economy came into view, as the smoke cleared, economists seemed surprised to find much of the manufacturing economy standing tall. In late September, David Hansen, senior economist at Development Research Partners, noted, "Colorado's manufacturing sector had contracted 1.3 percent YTD, compared with 4 percent across all industries," and that "manufacturing employment was actually up slightly over the year in July."
Those trends are holding. Data we collected from 20 of our final interviews of the year pointed to a healthy and vibrant sector: 17 companies were revising revenue forecasts upward for 2021. Three said forecasts would remain the same. None forecast declining prospects.
Of course some manufacturing industries are teetering, threatened not by growing demand but by socio-political decisions and the residue of a disastrous national response to the pandemic. A second and third wave predicted last spring by scientists and health care professionals now threatens to swamp craft distillers and brewers. That most have been able to adapt and survive owes to ingenuity and work ethic, and a profound connection with U.S. consumers, the same connection that bodes well for them, and for manufacturing, in the future.
That said, a pitiful public sector response has bordered on criminal. Or comical. Who among California's gubernatorial staff thought it a good idea to dine out in five-star style? Did Denver's mayor write his apology before boarding the plane to fly to Mississippi to visit relatives over Thanksgiving? It reads as such.
But a special place in pandemic posterity is reserved for Rep. Kevin McCarthy (R-CA), who continues to lead an assault on facts and common sense. McCarthy objected to a House vote to decriminalize cannabis by tweeting, "This week, your House Democrat majority is tackling the tough issues by holding a vote on legalizing pot and banning tiger ownership. Nothing for small businesses. Nothing for re-opening schools. Nothing on battling the pandemic. Just cannabis and cats."
It escapes McCarthy, who's from California but apparently not there much, that cannabis is driving a small business boom in Cali -- and in Colorado and other states that have realized whether you decriminalize or not, the cannabis economy will thrive. In Colorado, it's a $1.5 billion sector, fueling over 50,000 jobs. McCarthy would leave this economy in the black market. To what end, one wonders? In the hopes it will go away? Tell that to Roy Lipski, CEO of San Diego-based CREO, poised to deliver fermented cannabinoids to the Fortune 500 and profiled this week.
It's one of dozens of thriving manufacturing companies reshaping the economy and leaving us bullish on the future.
Bring on 2021.
Bart Taylor is publisher of CompanyWeek. Reach him at firstname.lastname@example.org.