As the United States economy continues to move in the right direction, a large number of business sectors are rebounding and posting solid numbers. Manufacturing, which is our nation’s second-largest sector, expanded for the 14th straight month in July. Last week, the Institute for Supply Management (ISM) reported that its manufacturing index jumped to 57.1, which is a four-year high. Several things are contributing to the growth of the manufacturing industry, and they are outlined in this Balboa Capital blog article.

Increased demand for products

According to the ISM, seventeen of the top-18 manufacturing industries posted gains in July. New orders are arriving in droves, which will result in a healthy production backlog during the second half of 2014. The increased demand for products is fueling job growth in the manufacturing sector. Over the past 12 months, manufacturing companies have added approximately 180,000 jobs.

Manufacturing is returning from overseas

“Made in the USA” is making a strong comeback. Many companies that have their products manufactured in other countries are bringing their operations back home. Reason being, the large savings of years’ past are shrinking due to rising transportation, energy, material and labor costs. In addition, companies are finding out that the physical location of their manufacturing plants can give them a competitive advantage. Having a US-based production allows for greater efficiency and improved customer service.

It’s good for business

Companies that produce their goods in the US can enhance their brand because consumers associate American-made products with high quality and optimum safety. Shopping habits are changing; consumers are willing to pay a little more for top quality products. Mom-and-pop businesses and large corporations alike realize this and are devoting all – or portions – of their operations to American-made products. Lastly, consumers enjoy supporting companies that help create jobs and strengthen the US economy.