Manufacturing in the United States

Manufacturing is a vital economic sector in the United States.^[1] The United States is the world's second-largest manufacturer after the People's Republic of China with a record high real output in 2021 of $2.5 trillion.^[2]

As of December 2016, the U.S. manufacturing industry employed 12.35 million people. A year later, in December 2017, U.S. manufacturing employment grew by 207,000, or 1.7%, employees.^[3] Though still a large part of the US economy, in Q1 2018 manufacturing contributed less to GDP than the 'Finance, insurance, real estate, rental, and leasing' sector, the 'Government' sector, or 'Professional and business services' sector.^[3]

Manufacturing output recovered from the Great Recession, reaching an all-time high in 2021, but manufacturing employment has been declining since the 1990s, giving rise to what is known as a "jobless recovery," which made job creation or preservation in the manufacturing sector an important topic in the 2016 United States presidential election.^[4]

Figure 1-Job measures: The blue line (left axis) is the ratio of manufacturing jobs to the total number of non-farm payroll jobs. It has declined since the 1960s as manufacturing jobs fell and services expanded. The red line (right axis) is the number of manufacturing jobs (000s), which had fallen by nearly one-third since the late 1990s.

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Figure 2-Output measures: Real (inflation adjusted) GDP (blue line) and nominal GDP (red line) from the manufacturing sector. While both rose from the trough due to the Great Recession, the real GDP had yet to regain its pre-crisis (2007) level as of 2016.

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Figure 3-Job measures, indexed: The red line shows the percent change in manufacturing jobs, measured relative to the 1999 as the starting point. The blue line shows construction jobs. Both were below pre-crisis levels in 2016.

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Figure 4-Productivity measures, indexed: Measured from the end of the recession (June 2009), employment (green line) is up about 5%, but real output is up over 30%, indicating a significant gain in productivity (i.e., output per labor hour).

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"The United States' share of global manufacturing activity declined from 28% in 2002, following the end of the 2001 U.S. recession, to 16.5% in 2011. Since then, the U.S. share has risen to 18.6%, the largest share since 2009. These estimates are based on the value of each country's manufacturing in U.S. dollars; part of the decline in the U.S. share was due to a 23% decline in the value of the dollar between 2002 and 2011, and part of the rise since 2011 is attributable to a stronger dollar.

China displaced the United States as the largest manufacturing country in 2010. Again, part of China's rise by this measure has been due to the appreciation of its currency, the renminbi, against the U.S. dollar. The reported size of China's manufacturing sector decreased slightly in 2015 due to currency adjustments.

Manufacturing output, measured in each country's local currency adjusted for inflation, has been growing more slowly in the United States than in China, South Korea, Germany, and Mexico, but more rapidly than in most European countries and Canada.

Employment in manufacturing has fallen in most major manufacturing countries over the past quarter-century. In the United States, manufacturing employment since 1990 has declined in line with the changes in Western Europe and Japan, although the timing of the decline has differed from country to country.

U.S. manufacturers spend far more on research and development (R&D) than those in any other country, but manufacturers' R&D spending is rising more rapidly in several other countries.

Manufacturers in many countries appear to be spending increasing amounts on R&D, relative to their value added. U.S. manufacturers spend approximately 11% of value added on R&D, an increase of more than three percentage points since 2002. A large proportion of U.S. manufacturers' R&D takes place in high technology sectors, such as pharmaceutical, electronics, and aircraft manufacturing, whereas in most other countries the largest share of R&D occurs in medium-technology sectors such as automotive and machinery manufacturing."

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The Congressional Research Service reported in January 2017 that:

Economy of the United States

National Network for Manufacturing Innovation

Manufacturing Sector Council, 2018.

National Occupational Research Agenda

U.S. Chamber of Commerce

– American workers on their jobs in the 1970s

Working: People Talk About What They Do All Day and How They Feel About What They Do

Made in USA

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