Pest Analysis About the American Manufacturing Industry

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PEST Analysis about the American Manufacturing Industry

In the article Can the Future Be Built in America, the author Pete Engardio describes the crucial issue of the manufacturing industry exodus from the United States and how smarter tax policies, low-cost loans, and industrial zones may help keep factories at home. For over a half century, American manufacturing has dominated the globe. It helped rebuild Europe and Japan and it stimulated the economic growth in China because of outsourcing. During this period, American manufacturing became synonymous with quality and ingenuity. At the same time, it not only met all the material needs of the American people, but raised America’s middle class because many high-paying manufacturing jobs spurred a robust and growing economy that depended little on foreign nations for manufactured goods. But the prosperous manufacturing industry became history in America. The fact is that manufacturing as a key component of U.S. economy has been plummeting. According to Economic & Market Trends, in 1965, manufacturing accounted for 53 percent of the economy. By 1988 it only accounted for 39 percent, and in 2004, it accounted for just 9 percent. Those data conveys how the American manufacturing industry is suffering a great recession. The American manufacturing industry can be analyzed with the PEST analysis.

Figure 1: PEST analysis

|Political |Economical | |High corporate taxes |Home economy—economic crisis | |Trading policies— Impose Europe-style feed-in tariffs on all utilities|Overseas economies—booming | |Policymakers’ attitude |Demand low | |Pay extra for...
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