Plus: Late-Year Rally Hinges on Retail Sales, Consumer Spending; and Bigger Industrial Technology Presence Planned for IMTS 2016
President Barack Obama last week unveiled another federally funded manufacturing research and development center as part of a national innovation network he envisions expanding over the next 10 years to support advanced manufacturing and high-tech jobs growth in the United States.
A public-private consortium to run the $200 million Integrated Photonics Manufacturing Institute will be selected after an open competition process, and funding for the center will be split evenly between federal and private dollars. The institute will focus on developing an "end-to-end ecosystem" for advancing technologies that use light and imaging for applications such as telecommunications and medicine, according to the White House.
President Obama tours Millennium Steel in Princeton, Ind., on Manufacturing Day. Credit: Pete Souza, White House
As competition for the photonics institute gets started, another competition is currently in gear to establish a $140 million R&D institute aimed at commercializing advanced composites manufacturing technologies. The two new institutes will be run by the Defense Department in partnership with private-sector companies, universities, trade and business groups, and academic and training institutions. Competitions for two more institutes are expected to be announced by the end of the year.
The Obama administration envisions the National Network for Manufacturing Innovation (NNMI) as a league of 45 institutes across the United States that will speed up high-tech manufacturing research, development, and commercialization. Using existing funds in the presidential budget, the adminstration has already established four institutes since 2012, including an original pilot center in Youngstown, Ohio, for expanding the use of additive manufacturing. Sitting in Congress right now is bipartisan legislation that would authorize funding for at least 15 more institutes.
The Defense Department is also leading the Lightweight and Modern Metals Manufacturing Innovation Institute, or LM3I, a Detroit-area group of businesses, universities and labs, and stakeholder organizations tasked with accelerating manufacturing of commercial and defense products using cutting-edge metals and alloys.
The Chicago-based Digital Manufacturing and Design Innovation Institute, or DMDI, for developing a digitized supply chain using virtual design, engineering, and communications technologies, is similarly a collaborative effort between the Defense Department, the private sector, universities and labs, and business organizations.
An institute based at the University of North Carolina, in Raleigh, called the Next Generation Power Electronics Institute, is pushing development and commercialization of wide-bandgap semiconductor devices and manufacturing processes. Being led by the Energy Department, the effort will benefit consumer electronics, telecommunications, utilities, and machinery and automobile makers that currently rely on silicon semiconductors.
Work by the Photonics Manufacturing Institute could lead to Internet networks with significantly greater bandwidths and capacities and needle-less medical technologies. The institute aims to create domestic foundry access, integrated design tools, automated packaging, assembly and testing, and workforce development methods as part of an ecosystem for the photonics industries.
The NNMI is modeled after Germany's renowned Fraunhofer Institute, a network of applied research and development facilities in charge of the innovation and commercialization process in that country which is the biggest in Europe. Each institute in the NNMI is designed to synchronize businesses, academic researchers, state and federal agencies, and non-governmental organizations and align resources for getting advanced technologies to market faster. Each public-private hub also serves as a "teaching factory" for training and preparing workers in the technologies when they are commercially ready.
According to the Commerce Department, U.S. manufacturing has added 700,000 jobs since February 2010, the fastest pace of job growth for the sector since the 1990s, while the sector has grown at nearly twice the rate of the national economy in the last few years. The new photonics institute was unveiled on National Manufacturing Day on Oct. 3.
Late-Year Rally Hinges on Retail Sales, Consumer Spending
August's strong personal income and spending growth, combined with continued expansions in the job market, low gas prices, and buoyant consumer confidence, could precipitate a surge in retail sales and give the U.S. economy a jump in the fourth quarter.
The Commerce Department is scheduled to release its advanced report on September retail sales along with updated August data on Wednesday, Oct. 15, but early individual retailer reports indicated strengthened sales as the school season returned.
In a separate report by the Commerce Department, personal spending in August rose 0.5 percent and was up 4.1 percent year over year, putting the economy on track for solid growth in the third quarter. July's personal spending picture was also brighter than initially estimated, as household expenditures held steady for a flat month rather than declining 0.1 percent. The department will publish its preliminary third-quarter GDP estimate at the end of this month.
The economy grew 4.6 percent in the second quarter after contracting 2.1 percent in a weather-affected first quarter. Economists are predicting growth of around 3 percent for the third quarter and fourth quarter. A strong September retail sales report would reinforce sentiment of a steadily growing economy, as consumer spending generates around 70 percent of total U.S. economic output.
According to an earlier Commerce Department estimate, U.S. retail sales grew 0.6 percent in August, the best margin in four months, on purchases of big-ticket items such as cars, furniture and home furnishings, and electronics and appliances. Falling gasoline prices, to their lowest levels in four years, and more hiring at U.S. employers are leaving Americans with more money in their wallets and boosting their confidence in making discretionary purchases.
But weak wage growth remains a concern among economists. Ken Perkins, president of Retail Metrics, told Reuters that wage stagnation is still a "roadblock" for retailers. Economists are betting on hourly wages to rise as strong hiring tightens the labor market and puts pressure on employers to increase compensation.
Commerce Department data shows that both personal incomes and disposable incomes rose 0.3 percent in August. The Labor Department said the private sector added 248,000 jobs in September, though average hourly earnings fell 1 cent in the month, and salaries have averaged just 2 percent higher year over year.
Bigger Industrial Technology Presence Planned for IMTS 2016
Deutsche Messe AG, the Hannover, Germany-based industrial trade fair organizer, will expand its lineup of co-located events at the 2016 International Manufacturing Technology Show in Chicago with the addition of three more trade fairs.
ComVac North America, Industrial Supply North America, and Surface Technology North America will join Industrial Automation North America and Motion, Drive & Automation North America at IMTS 2016, Sept. 12-17 at McCormick Place, with the new shows covering compressed-air and vacuum technology, industrial subcontracting, and surface treatment,respectively.
Deutsche Messe launched the Industrial Automation show at IMTS 2012, in partnership with IMTS organizer Association For Manufacturing Technology (AMT). At IMTS 2014, which took place in September, the Motion, Drive & Automation trade fair made its debut. The two shows drew a combined 194 exhibiting companies and occupied more than 50,000 square feet of space in McCormick Place's East building, doubling Deutsche Messe's 2012 footprint at IMTS.
The Deutsche Messe-AMT alliance is expanding IMTS, which has traditionally been a metal cutting and fabrication industry event, into a broad industrial showcase, as technology advances and a greater focus on energy usage and factory efficiency are creating a convergence among industrial sectors. Larry Turner, CEO of Hannover Fairs USA, the U.S. subsidiary of Deutsche Messe, told ThomasNet News at IMTS last month that the company's 2016 footprint will be half of McCormick Place's East building and resemble a miniature version of the gargantuan Hannover Messe industrial fair in Germany.
The five shows that will be co-located at IMTS 2016 all come from the Hannover Messe portfolio, which serves as an umbrella of 10 trade fairs. Deutsche Messe noted that with the resurgence of North American manufacturing and industrial production, investments are growing not just in production machinery but full factory essentials. The company said it was crucial to make them inclusive of the Chicago show.