Is the manufacturing sector in the U.S. dead? Not exactly. Actually, not even close to it.

Employment in the manufacturing sector may be down, but the dollar output is high.

Consider two questions:

  1. What country in the world has the largest amount of manufacturing?
  2. If manufacturing in the U.S. was a separate country, where would it rank compared to GDP of other countries?

Would this be your response?

  1. Lots of places other than the U.S.
  2. really low

Guess again.

Correct answer: 

  1. U.S.
  2. #10

The Economist has a great special report last week – A Third Industrial Revolution.

Check out the graph in the article Back to making stuff. Although the Chinese share of world manufacturing has grown steadily from about 5% in ’93 to about 18% in ’10, the U.S. has been in a trading range of 20% to 25% since ’75. Currently the U.S. is about 20% and China is about 18% of world output.

Even more astounding is the productivity difference between the U.S. and China. The article points out:

Its (referring to the U.S.) manufacturing output in dollar terms is now about the same as China’s, but it achieves this with only 10% of the workforce deployed by China, says Susan Hockfield, president of the Massachusetts Institute of Technology (MIT) and co-chair of President Barack Obama’s Advanced Manufacturing Partnership, an initiative recently set up with business and universities to create jobs and boost competitiveness.

Mark Perry at Carpe Diem answers the second question in the headline to his post If Separate, America’s Manufacturing Sector Would Rank as the Tenth Largest Economy in the World.

At an output of $1.8T (trillion!) in 2011, manufacturing in the U.S. would be behind Russia’s GDP and ahead of Canada.

U.S. manufacturing is far from dead or dying. 

Quite the contrary.

Mr. Perry’s summary:

Bottom Line:  American manufacturing is alive and well and poised for even greater growth in the future.  Flush with record-level profits, the manufacturing sector has never been financially healthier that it is today and the future of American manufacturing has never looked brighter.


Manufacturing booming.

Oil production from shale booming.

Gas production from shale booming.

Mining asteroids for raw materials to feed private space exploration.

In spite of the current economic doldrums, consider the long-term impact.  Then get out the sunglasses.

Leave a Reply

Your email address will not be published. Required fields are marked *