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The State of Manufacturing and Metalcasting

Doug Kurkul, CEO of AFS

The financial reporters on networks like CNBC are fond of saying that consumers account for 75% of economic activity. While that’s technically correct, they too often overlook the fact that manufacturing is the engine that drives economic growth and raises living standards. 

Doug Kurkul
Doug Kurkul

Approximately 13 million Americans work directly in manufacturing in America. Those numbers, while impressive, don’t tell the full story. According to the World Economic Council, while manufacturing represents about 10% of GDP, it drives 20% of capital investment, 60% of exports, 35% of productivity growth, and the lion’s share of the R&D investments that fuel innovation.

Jay Timmons, the president of the National Association of Manufacturers, put it well last month when he said, “Manufacturing employees are part of a force for good that is 13 million people strong—and growing. You are the economic engine of this country—a country that is a beacon for freedom and democracy for the entire world.”

Metalcasting: The Foundational Manufacturing Industry

Within manufacturing are many product and process sectors. The foundational sector for manufacturing is the foundry industry. It’s said that 90% of durable goods include foundry products. Metal castings are integral to bringing clean water to our homes and schools, generating energy, and manufacturing virtually every form of transportation. Highly engineered castings, as Modern Casting readers know, are also used in defense products, aerospace, construction, agricultural products, medical devices, certain consumer goods, and many other applications. Metalcasters account for $110.5 billion in economic activity, pay $32.1 billion in wages and benefits, and account for 490,000 jobs when considering direct, indirect and induced impacts.
Casting sales rose by more than 9% in 2022. The AFS Metalcasting Forecast and Trends is projecting another sales increase of more than 4% in 2023, despite the risk of a recession later in the year. 

One of the major challenges for metalcasters and other manufacturers alike is the lack of enough workers. There are currently 800,000 unfilled manufacturing jobs and many members of the American Foundry Society (AFS) have experienced this problem first-hand. Metalcasters are persevering through that challenge, as well as high inflation and unstable supply chains. AFS is proud of our industry’s record in responding to society’s challenges, whether it was shifting product lines at the onset of the pandemic to produce items suddenly in greater need, to foundries’ defense-related production, which has been in the news recently given world geopolitical events.

The Role of Public Policy

Unfortunately, our own government’s policies too often are working against all manufacturers, including metalcasters. In 2023, the incentives for R&D are reduced—this at a time when nations like China are pursuing R&D at historic levels. Likewise, incentives for investing in capital equipment are reduced. And the need for permitting reform, to allow manufacturers to modernize their plants and build new ones, has never been more apparent.

AFS maintains a Washington office, led by Stephanie Salmon, that advocates for more prudent public policies before the Congress as well as agencies such as OSHA. Corporate members regularly contact Stephanie to strategize on public-policy goals. Concurrently, Jeff Hannapel and Christian Richter of The Policy Group represent AFS and its members at EPA. Their work ensures that the agency takes into account real-world impacts on metalcasting as EPA pursues its mandate of environmental protection.

AFS is also investing in casting research as recommended by our 10 technical divisions and Research Board and is coordinating military-related research for the Defense Logistics Agency. Fostering technical innovation is a key part of the AFS mission.

So, in 2023, the state of manufacturing in general and metalcasting specifically is resolute. Recent laws including the infrastructure bill and the CHIPS act call for further metalcasting activity. Some 94% of foundries are making capital investments this year. Metalcasting leaders are deftly navigating today’s opportunities and challenges. And there is a growing realization from coast to coast that these vital economic sectors will be critically important in addressing the challenges that face us in the years to come.