Our 56th Annual Survey of Distributor Operations (p.39) shows that distributors continue to view the economy as one of their overriding concerns, but they identify many other problems as well. For example, the survey shows that distributors are becoming extremely worried about the number of manufacturers moving offshore.

One distributor told us that he had lost 15 percent of his business because his customers had closed down operations and moved overseas. Others said this problem would be even more severe in the years ahead.

It's an unfortunate occurrence in the United States that so many companies are relocating. No one denies that we live in a global environment and need to look for new markets to sell product.

But the simple fact is that we don't make enough products in the United States any more. The skilled tradesmen, tool and die makers, lathe operators and machinists are becoming relics at some companies. The ages of these skilled workers are climbing and there's no one around to take their place. New workers are looking for the "glamorous" jobs in finance, banking and investments. Students getting MBA's aren't looking to manufacturing; they're looking for the big bucks in other industries.

It's a sad commentary on life in the United States. Years ago, New England was the textile center of the world. These textile and apparel companies later moved to the South and Southeast where they could find lower paid workers. Today, many of those companies (and jobs) have moved overseas. Furniture makers in North Carolina are facing increased competition from foreign-made products. Factories are closing at record rates and hundreds of thousands of jobs have been lost, many of them never to reappear. The recession in manufacturing has lasted more than 18 months and there's no immediate end in sight.

The effect has been devastating to manufacturers and distributors.

Government and the private sector need to establish a game plan to deal with these problems. Manufacturing groups and trade associations need to promote the benefits of working in the manufacturing sector and there has to be a better link between companies and vocational trade schools. The problem isn't going to get any better unless we become proactive rather than reactive.