Goldman Sachs believes artificial intelligence (AI) is the key to reviving sluggish US manufacturing productivity. The firm argues that advancements in AI and robotics hold significant potential to boost the sector.
AI: The Real Manufacturing Savior?
According to Goldman Sachs analysts, including Joseph Briggs, a surge in innovation, particularly from AI and robotics, is the most promising way to overcome the long-term stagnation in manufacturing productivity. They believe this is far more likely to succeed than relying on tariffs.
Why Tariffs Won’t Work
Goldman Sachs dismisses the effectiveness of tariffs in bringing manufacturing jobs back to the US. They point out that production costs in other countries remain significantly lower than in the US, even after accounting for tariffs. China’s cost advantages and supportive industrial policies further hinder the impact of tariffs on reshoring.
Automation is Key
Briggs highlights the crucial role of factory automation in driving cost-competitive productivity growth. He emphasizes that the US hasn’t yet seen this technology implemented on a significant scale. Increased investment and adoption of automation are vital for a manufacturing resurgence.