Manufacturing in the United States

Manufacturing in the United States is a vital sector although its importance to the U.S. economy has been declining for the past forty years.^[1]

Major increases in the construction, finance, insurance and real estate, and services industries played a significant role in reducing manufacturing’s impact on overall U.S. production. In 1990, services surpassed manufacturing as the largest contributor to overall private industry production, and then the finance, insurance and real estate sector surpassed manufacturing in 1991. Since the beginning of the current economic downturn in 2007, only computer and electronic products, aerospace, and transportation have seen increasing production levels.

Size

The United States is the world's second largest manufacturer, with a 2010 industrial output of approximately $1,696.7 billion.^[2] In 2008, its manufacturing output was greater than that of the manufacturing output of China and India combined, despite manufacturing being a very small portion of the entire U.S economy, as compared to most other countries.

If the top 500 U.S.-based manufacturing firms were counted as a separate country, their total revenue would rank as the world’s third’s largest economy.^[3]

Modern manufacturing

The largest manufacturing industries in the United States by revenue include petroleum, steel, automobiles, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, and mining.

A large portion of U.S. industrial output, the United States leads the world in airplane manufacturing. American companies such as Boeing, Cessna (see: Textron), Lockheed Martin (see: Skunk Works), and General Dynamics produce a vast majority of the world's civilian and military aircraft in factories stretching across the United States.

A total of 3.2 million – one in six U.S. factory jobs – have disappeared since the start of 2000. The manufacturing sector of the U.S. economy has experienced substantial job losses over the past several years. In January 2004, the number of such jobs stood at 14.3 million, down by 3.0 million jobs, or 17.5 percent, since July 2000 and about 5.2 million since the historical peak in 1979. Employment in manufacturing was its lowest since July 1950. The United States produces approximately 21 percent of the world's manufacturing output, a number which has remained unchanged for the last 40 years. The job loss during this continual volume growth is explained by record-breaking productivity gains. In addition, growth in telecommunications, pharmaceuticals, aircraft, heavy machinery and other industries along with declines in low end, low-skill industries such as clothing, toys, and other simple manufacturing have resulted in U.S. jobs being more highly skilled and better paying.

Major export markets

Between 1983 and 2005, U.S. exports grew by 340 percent, with exports of manufactured goods increasing by 407 percent over the same period. In 1983, the primary export commodities were transportation equipment, computer and electronic products, agricultural products, machinery (except electrical), chemicals, and food and kindred products. Together these commodities totaled 69 percent of total U.S. exports. In 2005, the primary export commodities were largely the same: computer and electronic products, transportation equipment, chemicals, machinery (except electrical), miscellaneous manufactured commodities, and agricultural products. Together these commodities accounted for 69 percent of total U.S. merchandise exports.

Between 1983 and 2005, exports of computer and electronic products grew by 493 percent, overtaking transportation as the leading export commodity (which grew by 410 percent). Though agricultural products exports grew by 26 percent during this period, its share of overall merchandise exports fell from 12 percent in 1983 to 4 percent in 2005.

In 1983, the top trading partners for U.S. exports were Canada (21 percent of total merchandise exports), Japan (11 percent), United Kingdom (5 percent), Mexico (4 percent), Germany (4 percent), the Netherlands (4 percent), Saudi Arabia (3 percent), France (3 percent), Korea (3 percent), and Belgium and Luxembourg (2 percent).

In 2005, the top markets for U.S. exports were Canada (24 percent), Mexico (13 percent), Japan (6 percent), China (5 percent), United Kingdom (4 percent), Germany (4 percent), South Korea (3 percent), the Netherlands (3 percent), France (2 percent), and Taiwan (2 percent). Between 1983 and 2005, exports to Mexico increased by 1,228 percent, allowing it to replace Japan as the second-largest market for U.S. exports.

In the first quarter of 2010, overall U.S. merchandise exports increased by 20 percent compared to the first quarter of 2009, with manufactured goods exports increasing by 20 percent. As in 2009, the highest export commodities were transportation equipment, computer and electronic products, chemicals, machinery (except electrical), agricultural products, and miscellaneous manufactured commodities.

In the first quarter of 2010, the primary markets for U.S. merchandise exports were Canada, Mexico, China, Japan, the United Kingdom, Germany, South Korea, Brazil, the Netherlands, and Singapore. With the exception of the Netherlands, exports to all of these countries increased in the first quarter of 2010, compared to the same quarter in 2009. Notably, exports to Canada increased by 22 percent, Mexico by 28 percent, and China by 47 percent over this period. Exports to the two NAFTA partners accounted for nearly one-third (32 percent) of U.S. merchandise trade in the first quarter of 2010.

See also

• National Network for Manufacturing Innovation
• U.S. Chamber of Commerce

Further reading

• McCormack, Richard; Prestowitz, Clyde; Heidenger, Kate; Russo, John (2009). Manufacturing a Better Future for America. Alliance for American Manufacturing. p. 0615288197. 

References