The American Manufacturing Renaissance Is A Flop
REUTERS / Brian SnyderFor years, Americans have complained about their jobs being moved overseas where manufacturing costs have been much lower.
But with labor costs now rising overseas and energy costs falling in America, there is now excitement that an American manufacturing renaissance is at hand.
Unfortunately, there is no good evidence to suggest this is happening. In fact, some data suggest the opposite is happening.
"Evidence for a structural renaissance is scant so far," writes Goldman Sachs' Jan Hatzius.
And even if we could bring manufacturing back, is that what we really want? When manufacturing comes back, so does pollution.
Furthermore, the idea of reindustrialization represents the end of a mega-bullish secular trend for earnings.
The idea of an American manufacturing renaissance is a nice one. But the charts we looked at suggests its actually a combination of fiction and misfortune.