Mar. 24, 2013
However, Hatzius argues that all of the signs reflect a recovery that is “squarely cyclical,” not structural. In other words, U.S. manufacturing has yet to demonstrate that there is a major long-term shift going on in the world.
“Evidence for a structural renaissance is scant so far,” writes Hatzius. “Measured productivity growth has been strong, but US export performance — arguably a more reliable indicator of competitiveness — remains middling at best. And at least so far, there is not much evidence for large positive spillovers from the U.S. energy cost advantage to broader manufacturing output.”
Hatzius takes a close look at export market shares because they are “relatively easy to measure and are an intuitive gauge.” Here’s what the data tells him:
“But we believe the reason for this will be broad economic improvement that benefits all sectors, especially the more cyclical ones, not a structural U.S. manufacturing renaissance,” he writes.