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Small, midsize suppliers to benefit from U.S. manufacturing boom

June 19, 2012|By Ronald D. White

Small to midsize component suppliers are among the U.S. companies most likely to benefit first from a resurgence in American manufacturing, according to a new white paper by the Boston Company Asset Management, a BNY Mellon company.

The analysis, authored by Shirley E. Mills, vice president and senior research analyst, looked at various changes in the landscape affecting U.S. manufacturing opportunities, and it concluded that the best investment opportunities might not involve large-scale manufacturers.

"Our view is that the best opportunities lie elsewhere in the U.S. economy," the white paper said, specifically mentioning "investment opportunities in small and midsize U.S.-based component suppliers, transportation companies, raw material producers."

The white paper cites several changes that have helped boost the attractiveness of domestic manufacturing, including the decline in the value of the U.S. dollar that has helped reduce the cost of such things as Amercian wages, the easy availability of cheap U.S. natural gas, and the fact that global supply chains have gotten slower and more expensive, in part because of the high costs of fuel.

Potential winners, the white paper said, include small and midsize U.S.-based suppliers to manufacturing, industrial distributors and automation companies, as well as trucking companies that move more onshore freight than imports, railroads that move raw materials and long-haul shipments, and suppliers to those industries.

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