POLITICS: White House

Obama's rosy view of manufacturing overstates progress

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Photo - President Barack Obama takes a look at the piston installation area before he speaks at Detroit Diesel in Redford, Mich. on Monday, Dec. 10, 2012. Daimler AG plans to announce $100 million investment into the facility at Detroit Diesel. (AP Photo/The Detroit News, Robin Buckson, Pool)
President Barack Obama takes a look at the piston installation area before he speaks at Detroit Diesel in Redford, Mich. on Monday, Dec. 10, 2012. Daimler AG plans to announce $100 million investment into the facility at Detroit Diesel. (AP Photo/The Detroit News, Robin Buckson, Pool)
Politics,White House,Brian Hughes,Campaign 2012

To hear President Obama tell it, the United States is enjoying a manufacturing renaissance that was largely fueled by his policies.

"American manufacturing is growing at the fastest pace since the 1990s," Obama told Detroit autoworkers this week. The manufacturing sector has added nearly 500,000 jobs since the start of 2010, he noted.

But analysts said the president's portrayal of an industry on the decline for decades overstates improvements in its outlook.

Manufacturers may have added workers over the last two years, but the industry is still at its lowest point since before World War II. It shed thousands of jobs since the start of Obama's first term and now has 2 million fewer employees than before the recession, analysts noted.

"The outlook for American manufacturing and industrial employment is probably better, but that doesn't say much because the outlook has been so bad for so long," said Anirban Basu, chairman and CEO of Sage Policy Group in Baltimore.

Stephen Fuller, an economist at George Mason University, agreed. "When the president says manufacturing is back, that's sort of an overstatement that has been politicized," he said.

Factories have become a common backdrop for the president as he travels across the country, seeking to convince the public that a manufacturing boom will lead America's comeback from the grips of a devastating recession.

Administration officials defend Obama's public claims, saying that while manufacturing hasn't returned to its glory days, it is improving and Obama's economic policies are at least partially responsible for the gains. Obama pushed through tax breaks for manufacturers, invested in clean energy programs and enacted trade protections, all of which aided the industry, aides said.

"Are we all the way back yet? Of course not," one White House official said. "But we've clearly seen steady progress under the president's watch, beginning with the rescue of the auto industry, and the American people know the president is committed to continuing this growth."

But even as the president trumpets incremental gains, American manufacturing shrank in November to its weakest level since July 2009. The Institute for Supply Management's index of manufacturing activity showed a rating of 49.5 -- any measurement below 50 indicates the industry is shrinking.

Such volatility has caused some to question if manufacturing is just too volatile to support a broader economic turnaround. Regardless of who occupies the White House, manufacturing is unlikely to return to its heyday -- at least as a job creator -- thanks to enhanced technology and cheaper overseas labor, analysts said. Labor unions, too, have been a drag on manufacturers, and Obama remains supportive of measures that protect organized labor, they said.

"He focuses a lot on union versus nonunion," Basu said of the president. "States that have significant interests in manufacturing have been moving quickly to right-to-work status. Those policies are driven by a strong perception that employers are more likely to expand in areas that are right to work rather than union-rich."

During the Michigan speech in which he touted manufacturing gains, Obama also strongly came out against right-to-work laws, calling them a way "to take away your rights to bargain for better wages and working conditions."

bhughes@washingtonexaminer.com

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