• After contracting in the first two quarters of 2022, the U.S. economy rebounded in the third quarter, expanding 3.2% at the annual rate. Despite the improvement in activity in the third quarter, significant downside risks remained in the economic outlook, with the risk of a recession elevated. With that said, the current forecast is for real GDP to increase 2.0% in 2022 on an annual basis, with 1.1% growth in 2023.
  • Manufacturing value-added output increased to a record $2.809 trillion in the third quarter. Manufacturing accounted for 10.9% of value-added output in the U.S. economy in the third quarter.
  • Meanwhile, real value-added output in the manufacturing sector inched up to $2.259 trillion in the third quarter, as expressed in chained 2012 dollars. This remained lower than the record high in the fourth quarter of 2021, which was $2.325 trillion. Indeed, much of the gain in output was buoyed by higher prices.
  • New orders for durable goods fell 2.1% from a record $276.4 billion in October to $270.6 billion in November, but excluding transportation equipment, new durable goods orders increased 0.2% from $179.0 billion to $179.3 billion.
  • Despite data that remain highly elevated, the manufacturing sector has weakened notably in recent months, with durable goods orders excluding transportation equipment off 0.3% in the past five months (or so far in the second half of 2022). With that said, new durable goods orders have increased 6.5% year-over-year, or a modest 3.4% with transportation equipment excluded.

Artificial intelligence showed up more than ever before throughout manufacturing operations.

  • More than two-thirds of manufacturers are either using AI now or will be doing so within two years, according to MLC research.
  • Current use cases include predicting needed maintenance for equipment, forecasting product demand and monitoring performance metrics such as productivity and efficiency. Future use cases could include fully autonomous factories that run continuously with minimal human intervention.

Training on demand: Training for technicians and frontline operators used to mean time in a classroom with a live instructor. In 2022, more manufacturers turned to virtual, on-demand learning tools that allowed workers the freedom to learn at their own pace.

  • This ran the gamut from video content libraries to immersive augmented reality/virtual reality experiences that guide and correct trainees.
  • In 2023 and beyond, this type of learning experience will be essential to attracting and retaining younger workers who are familiar with digital learning and want the latitude to gain new skills on their own schedules.