Decaying National Infrastructure Is Challenging the Resurgence of American Manufacturing

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At a recent manufacturing summit hosted in Washington, D.C. by the National Association of Manufacturers (NAM), Vice President Biden effectively made the case for linking manufacturing and infrastructure development as inextricably linked e-components of a growing economy. The nation’s lawmakers often cite manufacturing as a sure-fire way to place the U.S. on the road toward economic prominence once again. They also promote the need for a national effort to improve an aging infrastructure that once contributed to an economic boom in post-war America. However, too often manufacturing and infrastructure are not discussed in tandem. During its summit, the NAM demonstrated foresight and leadership in stressing the link between the two.

A 2012 Global Competiveness Report by the World Economic Forum ranked the U.S. as 14th in infrastructure behind countries like France, Korea, Spain and Canada. Such a ranking may not be good enough to entice manufacturers that are looking for every advantage in an increasingly competitive world market. Considering that there are upwards of $1.8 trillion in goods and services trafficked within the U.S. every year, it stands to reason that a highly productive economic environment allows manufacturers to bring goods and services to market in an efficient, cost effective manner. While U.S. manufacturers produce 12% of America’s GDP, the United States invests a modest 1.7% of its GDP on infrastructure. That is not a formula for success. With an increased emphasis on restoring the country’s place in the world as a leader in manufacturing, policymakers and business executives must address a decaying infrastructure. If not corrected, that decay will inevitably hinder efforts to grow the U.S. manufacturing base. U.S. manufacturers already are concerned that a declining infrastructure is raising the cost of getting products to market; costs that they are forced to shift to the consumer. The inevitable effect of price increases is a downward shift in consumer spending patterns, further contracting an economy that has been slumbering for nearly a decade. Unfortunately the issue is not limited to domestic manufacturers alone. To attract direct foreign investment in manufacturing, America must exhibit a commitment to improving its decaying infrastructure.

Remember that American industry has always approached challenges like the ones outlined above as opportunities to be innovative and aggressive. Manufacturers, engineering firms and all organizations involved in the construction industry would be well served by mounting a concerted effort to promote legislation and appropriations designed to improve the nation’s infrastructure. Whether it’s government contracting or business-to-business partnerships, opportunities for manufactured goods and services in the area of infrastructure development abound. The most successful organizations will be those with a strategic plan for not only promoting a national effort on infrastructure development but also those that are well positioned to capitalize when the opportunities inevitably present themselves. We can easily predict that the nation’s airports, ports, rails and energy production centers will garner significant attention over the next quarter century. It will be more interesting to see which business leaders position their companies to lead America’s manufacturing resurgence. Stay tuned.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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