An important and interesting new study has just been released by AMT—The Association For Manufacturing Technology. It sheds light on some key facts about machine tools and their critical role in our economy.
Now those of us who are involved in metalworking manufacturing all know certain facts about machine tools—that in the last 20 years, they have become faster, more precise and more capable. We also know the fact that these machine tools have helped manufacturers produce more goods without adding a proportionate number of workers. That means that productivity in manufacturing has gone up—there's more output per worker.
Economists know that productivity is up, too, because they collect measurements that are evidence of this fact. Economists also know that when productivity is up, prices tend to stay steady even when the economy is growing. That means that inflation remains low.
What AMT's study shows is that the facts measured by economists are not telling the whole story about manufacturing. As a result, economists are likely to overlook the true role that modern machine tools and advanced manufacturing technology play in boosting productivity and keeping the economy strong. The study is titled Producing Prosperity—Manufacturing Technology's Unmeasured Role in Economic Expansion.
For example, the AMT study showed that advances in computer and information technology account for only one-half of overall non-farm productivity gains. Improvements in manufacturing productivity are largely contributing the other part. And most of these gains occurred in the durable goods sector, the sector where machine tools are most prominent and where advances in machine tools have had the greatest impact.
Perhaps the most revealing part of the study is an analysis of how consumers have benefited from quality improvements derived from advances in machine tools. In a nutshell, thanks to better, faster and more capable machine tools, consumers enjoy products such as automobiles that last longer, have fewer repairs and use less energy than ever before. These benefits are not captured by the facts that economists typically measure.
The study concludes by pointing out what government policies ought to be pursued to ensure that the latest generation of machine tools can continue to work its magic on our economy.
For a copy of the study, call (703) 827-5288 or e-mail firstname.lastname@example.org.