Five More Surprising Facts About Manufacturing

July 13, 2017 at 8:06 AMChad Moulder

5 Surprising facts about Manufacturing

Last week we looked at some of the impact that the Manufacturing industry had on the US economy, this week we look  at some additional facts that you may not have considered. American manufacturing has long been the backbone of US prosperity, but with the rise in automation and advances in efficiency and practices, some may be wondering if it still deserves that distinction. In this week's blog we look at 5 surprising facts about the state of manufacturing.

 

1.The manufacturing industry employs more than 12.3 million Americans, accounting for about 9% of the total workforce. Since the end of the Great Recession, manufacturers have hired more than 800,000 workers. There are 7.7 million and 4.6 million workers in durable and nondurable goods manufacturing, respectively. (Source: Bureau of Labor Statistics)

2. Manufacturers have become more competitive globally over the past two decades. Overall the manufacturing industry has seen a revolution in efficiencyOutput per hour for all workers in the manufacturing sector has increased by more than 2.5 times since 1987. In contrast, productivity is roughly 1.7 times greater for all nonfarm businesses. Note that durable goods manufacturers have seen even greater growth, almost tripling its labor productivity over that time frame.

To help illustrate the impact to the bottom line of this growth, unit labor costs in the manufacturing sector have fallen 8.4 percent since the end of the Great Recession, with even larger declines for durable goods firms. (Source: Bureau of Labor Statistics, Board of Governors of the Federal Reserve System

3. Over the past 25 years, U.S.-manufactured goods exports have quadrupled. In 1990, for example, U.S. manufacturers exported $329.5 billion in goods. By 2000, that number had more than doubled to $708.0 billion. In 2014, it reached an all-time high, for the fifth consecutive year, of $1.403 trillion, despite slowing global growth. With that said, a number of economic headwinds have dampened export demand since then, with U.S.-manufactured goods exports down 6.1 percent in 2015 to $1.317 trillion. (Source: National Association of Manufacturers

4. For every $1 spent in manufacturing, $1.81 is added to the US economy. This is the greatest multiplier effect of any economic sector. Additionally, for every worker in manufacturing, another four are hired elsewhere. (NAM calculations using economic impact modeling)

5. The cost of federal regulations fall disproportionately on manufacturers, particularly those that are smaller.Manufacturers pay $19,564 per employee on average to comply with federal regulations, or nearly double the $9,991 per employee costs borne by all firms as a whole. In addition, small manufacturers with less than 50 employees spend 2.5 times the amount of large manufacturers. Environmental regulations account for 90 percent of the difference in compliance costs between manufacturers and the average firm. (Source: Crain and Crain (2014))

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5 Surprising Facts about U.S. Manufacturing

July 12, 2017 at 12:54 PMChad Moulder

 5 Surprising Facts About U.S. Manufacturing

American Welder in Action

In this week's post, we look at five surprising (and frankly, amazing) facts about the current state of the United States manufacturing industry. 


The Manufacturing Industry is the largest and most dynamic sector of the U.S. economy.

MarketWatch estimates that the gross output of US manufacturing accounts for roughly 36% of the nation's GDP or about $6.2 trillion dollars annually. This is nearly double any other sector such as government, real estate, and professional and business services. Even more surprising when one looks at the fact that the manufacturing industry accounts for only one out of every 11 jobs in the US.

 

U.S. Manufacturing is the world's 3rd largest economy on the planet.

 

US Manufacturing VS the World (chart)

According to the Manufacturing Institute, in the 20 years ending in 2012, manufacturing output increased more than 83 percent. This feat is even more impressive when one considers that the United states suffered not one but three major recessions including the "Great Recession" which lasted more than six years and a decline in US GDP of 5.1%. 

 

The Manufacturing Industry is leading the way on renewable energy.

Solar Array Mountain background

According to the U.S. Energy Information Administration, the manufacturing industry used 2,269 BTUs of renewable energy, more than the three other sectors combined. Additionally, of all the sectors manufacturing was the only sector to reduce their CO2 emissions. In fact, between 1990 and 2012 the manufacturing industry has shrunk their CO2 footprint by 13%; no small feat. 

 

Manufacturing is investing heavily on research and development. 

Research and Development

Annually, the manufacturing sector invests roughly 3.9% of their total sales back into research and development. This is well above the 2.3% found in other industries. This forward-looking approach has yielded many boons for the economy and country in general and should also be credited with the push for greater STEM education as a means of protecting domestic economic security and creating a talented, competitive workforce.

 

The vast majority of manufacturing companies in the United States are actually very small.

Small Business Manufacturing

In 2014, there were 251,901 firms in the manufacturing sector, with all but 3,749 firms considered to be small (i.e., having fewer than 500 employees). In fact, three-quarters of these firms have fewer than 20 employees. (Source: U.S. Census Bureau, Statistics of U.S. Businesses)

 

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