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American manufacturers through the first few months of 2017 appear to have turned a corner after years of slogging through the mud.

With Friday marking National Manufacturing Day, a glance back at the past several months of data shows employment gains have been considerable and consistent. Business and manufacturing confidence metrics have risen to their highest levels in years. And exports, factory orders and industrial output have all been solid in recent months as economic activity for the country’s goods producers appears to be trending in the right direction.

The improvements have in some ways coincided with President Donald Trump’s arrival to the Oval Office. But there’s some disagreement as to how much credit the president should get for goods producers’ recent run of success, given the orders he has called for and the bills he has signed to date.

“I think it’s entirely cyclical,” says Mark Zandi, chief economist at Moody’s Analytics. “This was going to happen regardless of who was in the White House and regardless of what policy they’re pursuing.”

Zandi – who served as a donor and economic adviser to the 2008 presidential run of Sen. John McCain, R-Ariz., and who also donated to former Secretary of State Hillary Clinton’s primary campaign during the 2016 election cycle – pointed to the past several years of global economic sluggishness and volatile commodity prices as hindrances to U.S. goods producers that have, through no fault of Trump’s own, gotten better in 2017.

 
 

And, indeed, the International Monetary Fund estimates the global economy grew at just a 3.1 percent clip in 2016 – its softest showing since major economies were submerged in financial and economic crises in 2009. Growth between 2012 and 2015 zigzagged between 3.4 percent and 3.5 percent without much forward progress – with European expansion stubbornly running beneath 2 percent, China’s gross domestic product gains slowing and Canada and Mexico consistently running below the global average.

 

That international weakness reduced demand for American-made goods abroad. And with depressed commodity prices in 2014 and 2015 that rebounded only modestly last year complicating manufacturing work on drill bits and resource mining equipment, U.S. producers weathered a rough couple of months.

The Institute for Supply Management‘s monthly purchasing managers’ index – which broadly outlines economic activity as it relates to U.S. manufacturing – showed goods producers briefly fell into recession in 2014 and 2015 and at times struggled in 2016, though that index in September climbed for the 13th consecutive month to its highest level since 2004.

Similarly, a separate purchasing managers’ index compiled by research and analytics company IHS Markit showed American manufacturing fall into a rut in 2016, as output dipped and payrolls wavered.

But that index, much like the ISM metric, has jumped back to life in recent months, with its employment sub-index in September climbing at its fastest rate in nine months. Anecdotal reports from regional banks at the Federal Reserve have also been broadly positive and point to a production sector enjoying a healthy run of activity.

“Hiring in the manufacturing sector has been solid this year as the industry has shaken off last year’s commodity slump, the dollar has weakened and global growth has strengthened,” a team of analysts at Wells Fargo Securities wrote in a research note Monday, noting that a softer U.S. dollar makes products made in the U.S. more competitive on an international stage.

Much of this manufacturing success happened to pick up earlier this year, around the time Trump was sworn in as the 45th president of the U.S. And, to be sure, 2017’s run of job gains and output improvement has not been lost on the commander in chief.

“Under my administration, the era of economic surrender is over, and the rebirth of American industry is beginning. America is winning again, and America is being respected again,” Trump said last week during a tax-focused speech before the National Association of Manufacturers. “Manufacturing confidence is at an all-time high. America is finally back on the right track.”

And, indeed, a sentiment tracker published each quarter by the National Association of Manufacturers has never seen a stronger three-quarter run than what has been seen through the first nine months of 2017. The Bureau of Labor Statistics estimates manufacturing employers have created 92,000 new jobs over that span and that payrolls in August climbed to their highest levels since early 2009.

Jay Timmons, the manufacturing association’s president and CEO, said in a statement last week that the record levels of production optimism have materialized “in no small part because President Donald Trump has delivered on his commitment to put the full weight of the White House behind bold tax reform.”

 


But it’s on this point that analysts are torn. Manufacturers broadly expect tax reform will have a significant impact on their operations. But it hasn’t actually happened yet, leading many to question what Trump has done for goods producers to date.

 

Though he has been involved in some high-profile factory investment announcements – notably at a Carrier plant in Indiana, during which the company said it would save hundreds of jobs from being offshored – not all of these commitments have panned out as expected.

Carrier, for example, decided to lay off U.S. workers anyway earlier this year despite Trump’s visit to a company facility shortly after he won November’s election. Trump just a few months before the layoffs began used Carrier as an example of his ability to attract and retain jobs, leaving the president with egg on his face when some of the jobs ultimately left the U.S. anyway.

Trump, for his part, appeared to acknowledge as much during a recent tax-focused speech in Indiana, when he noted that “some [companies] made some great promises to me, but those promises are only being partially kept because they’re incentivized to leave.”

“Donald Trump’s promise to bring back millions of manufacturing jobs was an important element in his surprising electoral victory,” Fred Block, a research professor at the University of California, Davis, wrote in a blog post for the progressive Century Foundation last month.


“However, there are good reasons to doubt that Trump’s policies will achieve what he has promised. Already, announcements from companies such as Carrier and Boeing indicate that big firms are continuing to move jobs overseas, despite Trump’s promises that he would stop this trend in its tracks.”

Zandi, meanwhile, notes that much of what Trump has done for goods producers to this point through executive action and the signing of legislation is either symbolic or still in the works. The president established an Office of Trade and Manufacturing Policy and ordered a review of the country’s manufacturing operations – while also directing the executive branch to promote “Buy American, Hire American” policies. But Zandi says many of these directives either lack substance, haven’t been completed yet or haven’t had much time to play out.

“There’s been a lot of executive orders and talk … but nothing substantive that would change the dial here in any significant way, certainly not quickly,” he says. “I wouldn’t ascribe any of this to any change in regulatory policy or any other policy.”

But it’s the optimism about reduced regulations, the optimism about the prospects of tax reform and the optimism about a president who has dedicated a significant portion of his time to promoting American manufacturing – along with clearly apparent optimism on Wall Street – that is giving those in the industry hope.

Rick Schreiber, a board member of the National Association of Manufacturers who also heads the manufacturing and distribution practice at BDO USA accounting and consulting outfit, says that manufacturers “by and large” are “still holding down the pause button on many investment decisions” but that many don’t have the luxury to wait for tax and regulatory policies to play out.

 


“There is optimism, to be sure, around the potential for and savings through an overhaul of the tax code. But optimism alone doesn’t enable sound planning – only enacted policies will give manufacturers that certainty,” he says. “Manufacturers have to remember that even if reform is enacted, there’s an implementation timeline for any changes to go into effect. The pace of technological advancement isn’t slowing down to wait for policies to shake out and businesses to implement changes.”

 

Specifically, Schreiber points to the Trump- and GOP-led tax plan’s promises to allow companies to write-off investments into new equipment as tax-deductible. He said some manufacturers have been left “feeling a tug-of-war between the immediate need to invest in upgraded factory equipment that will modernize production … against the potential savings they could enjoy later if that write-off does come to fruition.”

“The conversation today comes down to weighing the achievable strides in productivity and profitability that come with investments in innovation, against the much less-certain savings they may achieve in the future, after a bill passes and after implementation,” he says.

Trump has undoubtedly made the manufacturing sector hopeful again. But whether he has been responsible for making it great again – and whether he will be going forward through efforts like tax reform – is still uncertain.