By the time financial markets around the globe started to tumble in October 2008, so much of the manufacturing industry was already deep in a recession that had stretched across the better part of a decade. Millions of workers had been sent home. Thousands of factories had been shuttered. Whole companies just disappeared. None of it was coming back. It was gone for good.
Manufacturing was not, of course, the only industry hit hard prior to the start of the larger recession, but perhaps no industry was affected more since the turn of the millennium. About a quarter of a million manufacturing jobs were lost over the course of a decade, the large majority of them prior to 2008. As the recession spread from one industry to another, manufacturers often still let go of the most employees.
The cycle was vicious, and it continued month after month.
How is it possible, then, that less than two years after the economy turned, manufacturing is on the rise again? Manufacturing activity increased again in May, according to the Supply Management’s index, the 10th straight month of growth. And even though that growth has started to slow a bit, growth is still growth. Were the 2008 levels just so low that any growth is significant? Or is the sustained increase in manufacturing a sign for the rest of the economy? Nothing is certain, but all of the indicators do point up, however modest, rather than down.
“Texas was about nine months behind the rest of the country, so we were kind of latecomers to the party, I guess,” says Randy Gregg, assurance partner, BDO USA LLP. “But over the last few months, the recovery appears to have started, although it has been tentative and slow, and there are some mixed signals out there. Many companies appear to be generally optimistic about 2010 and thinking that it will turn at the end of the year and they will be able to get back to business.”