The two-decade “trauma” that the U.S. manufacturing industry has experienced may be ending, according to a recent article in The Wall Street Journal that says, “we believe 2020 marks the bottom of that long and high-profile decline.”

Even though the recent pandemic has poured salt in the manufacturing industry’s wounds, the article contends that there is more reason for high hopes in 2021 “than at any time since the 1990s,” citing the following three major themes currently gaining traction:

• Quick recovery from the recession: “The industry is poised to emerge from the Covid-19 recession much more quickly and robustly than it usually does from downturns” because the market for certain goods has remained strong, thus allowing some manufacturers to remain more stable even though others were hard-hit. “There is no precedent to this we can find,” the article says, adding, “We’ve never had a recession so bifurcated.”
• Localization of supply chains (onshoring): “Pre-pandemic, there was already a rising concern around supply-chain risks,” the article reports, citing rising tensions with China and the Trump administration’s “broad use of tariffs and verbal warnings.” But those tensions reached a fever pitch as the pandemic emerged and supply chains shut down. “High-profile shortages, such as the lack of PPE for hospitals, may have served as a broader wake-up call for the supply-chain issues that had been creeping up over time.”
• Technological advancements that “level the playing field between the U.S. and countries with lower labor costs.” The article notes that advancements in data analytics as well as the low cost of cloud computing and artificial intelligence have collectively brought the U.S. manufacturing factory into a new age: “Companies that have already made these investments report all kinds of secondary benefits, including higher safety levels, higher employee morale, lower turnover among staff, higher quality control, faster new-product cycles and lower environmental impacts.”

While the pandemic offered few silver linings, the article notes that “the rate of positive change for American manufacturers has been accelerated for the better.” It concludes, “The outlook hasn’t been this encouraging for a very long time.”