The unprecedented resurgence of manufacturing following the crash of 2008 has laid the groundwork for a positive 2012, according to AMT – the Association for Manufacturing Technology and AMTDA – the American Machine Tool Distributors’ Association. The most current U.S. manufacturing technology orders put the year-to-date total at $4,529.11 million, up 80.5 percent compared with 2010 and the second highest dollar amount in the last 15 years. As of October, manufacturing technology orders had already surpassed the total value accumulated in 2007.

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\”It’s long been recognized that analysis of manufacturing technology orders provides a reliable leading economic indicator, as it is an indicator that manufacturing firms are investing in capital equipment to increase their capacity and improve productivity. Manufacturing technology provides a foundation for all other manufacturing,\” says Douglas K. Woods, president of AMT.

The Midwest and Central regions of the U.S. have seen the greatest surge in manufacturing technology orders. The Midwest’s manufacturing technology orders in 2011 are 105 percent more than the comparable figure for 2010. This large increase is the result of the region’s large traditional customer base.

It is also where the oldest equipment resides and the industries impacted most by the weak dollar and reshoring trend are located. The Central region pick-up – 85 percent higher compared to 2010 – was powered by the growth in the energy business and secondly by the automotive industry. Beyond manufacturing technology, overall U.S. manufacturing is robust. Despite the past several years trend of offshoring, the value of U.S. manufacturing output increased by one-third to $1.65 trillion between 1972 and the 2008 recession. Even though China accounted for 19.8 percent of global manufacturing value in 2010, the U.S. was strong with a share of 19.4 percent.

\”The factors that are fueling this tremendous surge are the traditional reasons that drive growth in investment, but what is unusual about the current rebound is that all factors have come together at one time. This is something that’s never been seen before and as a result we are seeing a true renaissance for manufacturing in the U.S.,\” Woods said.

The average age of machinery currently in use at U.S. manufacturing facilities crept up from nine years in 2007 to 13.5 years, and as demand started to increase the need for investment to replace the aging equipment became apparent. Those investments are being made in completely new technology.

Expanding markets worldwide are playing an important role as manufacturing grows. China accounts for almost one-half of the world’s total consumption of manufacturing technology. India’s economy is growing at double the Western economy’s rate, with expectations for more China-like development soon. As it prepares for major world events including the Olympics and the FIFA World Cup competition, South America faces the challenge of building infrastructure that can support the events. Russia, South Africa, the Middle East and South Asia are on the fringe, but nevertheless contribute to growth in the global manufacturing economy.

Another factor boosting U.S. manufacturing is the reshoring phenomenon. More work is coming back to the U.S. from foreign shores and there is greater foreign direct investment in U.S. facilities. The quality of work in the U.S. is proving to be more valuable than originally thought in the off-shoring investment calculation. Companies face increasing costs in logistics issues with the delivery of components and the exporting of completed products to North America.

\”When the total cost of manufacturing is calculated, the U.S. is a very favorable environment,\” Woods says. \”In fact, new research from the Boston Consulting Group shows that transportation goods such as vehicles and auto parts, construction equipment, appliances, electrical equipment and furniture are among the sectors that could create up to 3 million jobs as a result of manufacturing returning to the U.S.\”

While the outlook for 2012 remains positive, jobs remain an unresolved issue, Woods says. \”Despite the high number of Americans out of work, manufacturing jobs continue to go unfilled,\” he says. \”That is because the factory floor today is very different from what it used to be. It is awash with new technologies and processes that require advanced training and adaptable skills. We need a ‘smartforce’ of workers who are up to the job.\”