A slowdown in factory production can translate into job cuts, which in turn reduces consumer spending - a major component of the economy (72%). A 5% drop in consumer spending would result in the mother of all recessions.
Reference Article: Manufacturing Sector Growth at 5-Year Low
Buying product labeled “Made in America” will have a major impact on our economy. Even if the price is double and you can only buy one “Made in America” product vs. two made somewhere else – it will have a drastic effect on the US economy. In the months and years to come as more and more jobs are lost to the recession, buying American products will become almost a national security issue.
What we really need is a national consumer led marketing campaign to only buy products “Made in America”. Buying products made in America will also help reduce our record trade deficit, which is draining about 60 billion a month out of America. We are getting 60 billion dollars poorer every month.
The biggest reason that factory orders have hit a 5-year low is because most of the manufacturing sector in America (what’s left of it) is producing products for the housing market. With new home construction slowing to a 27-year low, it’s no wonder factory orders are in the toilet.
Reference Article: Home Construction Slows to 27-Year Low
The number of companies that will be affected by housing is in the thousands. Companies that produce material like lumber, tools, nails, trucks, etc. are all facing the housing market that has virtually stopped. Most of the remaining manufacturing sector that has not been relocated to China is primarily in the housing market, producing appliances, carpet, OSB, furniture, cement block, etc. All of these companies are in the process of adjusting to the new housing market. Most of them are just starting to layoff as they continue to hope for a housing turnaround. But, it’s just not going to happen with houses for sale everywhere and record forecloses. Millions of jobs will be lost.
We need a national movement to buy products "Made in America". This will boost the economy and create jobs. We need a national retail chain store to get behind this, only selling products "Made in America" and then promote and market their support for the US economy. If this happens, I will be the first to shop there.