As the economy recovers and companies speed up their rate of production, both domestic and offshore manufacturing are on the rise. Businesses could be anticipating a surge in consumer demand or strong sales in the coming months, leading to the growth the sector is currently experiencing.
Manufacturing on the rise at home and overseas
Though manufacturing numbers in China were less than impressive in February, they appear to be on the rise again this month. According to data released by HSBC, the flash manufacturing Purchasing Managers' Index (PMI) for March jumped to 51.7, compared to the final reading of 50.4 seen last month. This number indicates the Chinese manufacturing sector is experiencing growth and could continue to expand.
However, Chinese manufacturing may not expand as quickly as anticipated if companies continue to reshore their production strategies to better manage risk and take into account overseas logistics and natural disasters. Manufacturing grew at an even more impressive rate in the United States than it did in China. Financial data firm Markit just released its preliminary PMI for March and estimates domestic production jumped from 54.9 from the final reading of 54.3 seen in February.
Businesses increasing their production levels can't only consider the amount of goods they are manufacturing - they must also consider how these actions impact their entire supply chains. Procurement of raw materials must increase for workers to be able to fill orders and logistical processes must be altered or enhanced for the increased amount of goods to get to market in a timely and cost effective manner. Optimizing these processes as production increases is critical, and companies that don't take the initiative to consider how more manufacturing impacts other processes may fall behind on orders or sales.