A report published by the U.S. Department of Commerce ("Commerce") in July stated that orders to U.S. factories rose in May. According to the report, the increase in orders was caused, in part, by increased business investment over the last three months. Contributing to May's increase in factory orders were orders for aircraft, machinery, computers, and household appliances.
Data from the Institute of Supply Management indicate that U.S. manufacturing activity increased during five of the first six months of 2013. The increasing manufacturing activity suggests that the level of U.S. manufacturing activity may improve in the second half of 2013 as well. This suggestion is supported by the higher export orders and auto sales in June and the recent increase in business investment, noted above.
Despite some improvement in manufacturing activity, concerns persist about manufacturing employment. The manufacturing sector helped lead the economy out of recession in 2009 and 2010, adding 500,000 jobs during that period, but manufacturing jobs have been flat for over a year. Manufacturing jobs fell in June even while the level of manufacturing increased, consistent with the trend in recent years of U.S. manufacturers producing more with fewer employees.
The apparel sector is among the manufacturing sectors that is beginning to experience a reversal of past trends toward offshoring production. Major clothing designers and retailers have moved some production to the United States from other countries in the last several years. These moves have brought an estimated 1,000 jobs to the United States. As one example of the recent trend, Brooks Brothers has begun "reshoring" jobs producing suits, dress shirts, overcoats, and pants from China and other Asian countries to a factory in Massachusetts.
Factors encouraging U.S. apparel manufacturers to consider bringing manufacturing back to the United States include rapidly rising Asian factory wages, increased willingness of some consumers in the United States and elsewhere to pay higher prices for products made in the United States, and problems with the quality of some imported apparel. Some clothing manufacturers also have found the shorter lead times afforded by manufacturing in the United States particularly advantageous as they allow for quicker responses to changing consumer preferences.