This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Is The U.S. Manufacturing Revival Built To Last?

By Xavier Brenner

Is the U.S. manufacturing revival the real deal? Optimists seem to be growing in number. John Koten at the Wall Street Journal has a very upbeat piece out today suggesting that all manner of digital technologies are transforming the way U.S. companies design and manufacture their products. Koten even goes so far as to suggest that a new industrial revolution is underway.

Why all the excitement? Koten and others have pointed to the following trends: the falling costs of electronic sensors, microprocessors and other components; the emergence of affordable cloud computing systems that give smaller companies access to Big Data applications; and new tools like 3D Printers that give engineers greater flexibility in design and the ability to quickly pump out prototypes.

Manufacturing

As McKinsey Managing Partner Dominic Barton told the Journal:

On the innovation front, we are likely to see advances in robotics, big data, materials and additive manufacturing (e.g., 3-D printing). Advances in vision systems, hydraulics and artificial intelligence are making robots far more dexterous and flexible. Instead of being fenced off and dedicated to the dirty, dangerous and difficult jobs, robots will be able to work alongside humans and may soon be able to take on tasks that were thought to be too delicate for machines or uneconomical to automate. That has very important implications for where products are built.

Observers like Ben Dickey, who manages the Covestor Growth Plus Income, make the case in his recent commentary that cheaper energy could also boost manufacturing productivity. The oil and gas shale revolution is lowering factory operating costs and is attracting investment from global manufacturing companies, according to Reuters. Dickey is very bullish about industrial stocks like Deere (DE) and Caterpillar (CAT).

Industrial technology companies that specialize in 3D Printers are all the rage. Stocks such as Stratasys (SSYS) 3D Systems (DDD), Arcam (AMAVF) and Proto-Labs (PRLB) have registed big gains this year. Check out the following chart.

SSYS Chart

SSYS data by YCharts

But not everyone is buying the revival story. In a new report, Daniel Meckstroth, chief economist with the Manufacturers Alliance for Productivity and Innovation, notes that plant closings have outpaced plant openings every quarter for the last 13 years--and there is no evidence that is turning around despite the recent positive trends in manufacturing.

And Covestor’s Barry Randall, who manages the Crabtree Technology portfolio, recently took a very skeptical look at the whole 3D Printing phenomenon. Randall’s take:

There’s no doubt that 3D printing (also known as stereolithography to old-timers like me) offers tangible benefits to manufacturers, shortening product development times and reducing waste. But there are two dangers on the horizon for investors: 1) the assumption that a consumer-oriented mass market will develop for these machines, and 2) the destructive cannibalization of these companies’ profitable high end devices.

Photo Credit: danielfoster437

null

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,084.52 +4.95 0.03%
S&P 500 2,001.28 +4.54 0.23%
NASDAQ 4,574.3410 +16.6460 0.37%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs