U.S. Manufacturing Economy (2024)

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Applied Economics in US Manufacturing

U.S. Manufacturing Economy (1)

SUMMARY: In terms of value added, the primary measure of economic activity, the U.S. is the second largest manufacturing nation in the world behind that of China. The U.S. ranking as a brand suggests that it tends to be a differentiator rather than a cost competitor; however, a number of nations rank higher as a brand. In terms of value added, the largest subsectors of manufacturing are computer/electronic products followed by chemical products and food, beverage, and tobacco products.

There are three primary aspects of examining U.S. manufacturing statistics on competitiveness: (1) how the U.S. industry compares to other countries, (2) the trends in the domestic industry, and (3) the industry trends compared to those in other countries. NIST AMS 600-13provides statistics on these aspects. Below are highlights from this publication. Due to the necessity to use a selection of datasets, there may be minor discrepancies between various statistics. Additional data and statistics can be estimated using NIST’s Manufacturing Cost Guide.

Manufacturing in Brief

Some brief figures on U.S. manufacturing include the following:

  • In 2022, Manufacturing contributed $2.3 trillion to U.S. GDP amounting to 11.4% of total U.S. GDP, measured in chained 2012 dollars
    • Including direct and indirect (i.e., purchases from other industries) value added, manufacturing contributed an estimated 24% of GDP.
  • According to the Current Population Survey, there were 15.2 million employees in U.S. manufacturing in 2022, representing 9.6 % of total U.S. employment
  • Manufacturing accounted for 76.6% of total U.S. environmental impact according to NIST’s Manufacturing Cost Guide
  • Average compensation in U.S. manufacturing is 6.3 % higher than that for total private industry

U.S. as a Brand

Frequently, countries are discussed as brands. Two rankings provide insight into the U.S. as a brand:

  • U.S. ranks 10th among 49 total countries in Statistica’s Made-in-Country Index
  • U.S. ranks 8th in the Ipsos National Brands Index

U.S. Manufacturing Economy (2)

Inflation

Inflation has increased in recent years, which diminishes purchasing power.

  • The prices received by producers for all manufacturing for the past two years between July 2020 and July 2022 has increased 33.4%
    • For context, in the fifteen years prior to that (i.e., June 2005 to June 2020) it increased 27.1% in total

U.S. Manufacturing Economy (3)

Manufacturing Growth

  • U.S. compound real (i.e., controlling for inflation) annual growth between 1996 and 2021 (i.e., 25-year growth) was 2.1%, which places the U.S. below the 50th percentile.
  • The compound annual growth for the U.S. between 2016 and 2021 (i.e., 5-year growth) was 2.2%. This puts the U.S. just above the 50th percentile, but below the world average of 2.9 %.

U.S. Manufacturing Economy (4)

U.S. Manufacturing Economy (5)

Manufacturing Industry Size

  • Manufacturing accounts for 17.5 % of global GDP
    • Since 1970, global manufacturing ranged between 13.7% and 17.5% of global GDP
  • U.S. manufacturing value added, as measured in constant 2015 dollars, is 16.3 % of global manufacturing value added putting it second to that of China, which is 30.9 %.
  • Among the ten largest manufacturing countries, the U.S. is the 2ndlargest manufacturing value added per capita while China ranked 8th. Out of all countries the most recent U.S. rank is 14th
  • Out of six manufacturing industries, the U.S. ranked 2nd in all but textiles/clothing where it ranked 4th. China was the largest for all industries.

U.S. Manufacturing Economy (6)

Productivity

  • The five-year annual compound growth in labor productivity is -0.6 %.
  • The five-year annual compound growth in multifactor productivity is 0.7 %.
  • The U.S. is ranked ninth in output per hour among 142 countries using data from the Conference Board.
  • In 2021, Manufacturing total factor productivity was 3.4 % above its 2005 level.
    • In 2021, durable goods was 8.7 % above its 2005 level.
    • In 2021, nondurable goods was 1.2 % below its 2005 level.

U.S. Manufacturing Economy (7)

Economic Environment

There is no agreed upon measure for examining the environment for research, innovation, and other factors for doing business, but there are a number of common measures, which are discussed below.

  • The ranking of the U.S. in these measures is a mixed bag, ranking high in some and lower in others.
  • The U.S. ranks
    • 4th in 2020 patent applications
    • 5th in 2020 research and development expenditures as a percent of GDP
    • 17th in 2019 researchers per million people
    • 24th in 2020 journal article publications per capita.
  • Competitiveness indexes
    • The 2023 IMD World Competitiveness Index, which measures competitiveness for conducting business, ranked the U.S. 9th
    • The World Economic Forum, which assesses the competitiveness in determining productivity, ranked the U.S. 2ndin 2019.
    • The Competitive Industrial Performance Index, which measures capacity to produce and export manufactured goods; technological deepening and upgrading; and world impact, ranked the U.S. 5th.

U.S. Manufacturing Economy (8)

Types of Goods Produced

The largest manufacturing subsector in the U.S. is computer and electronic products followed by chemical manufacturing and food, beverage, and tobacco products, as seen in Figure 2.9 and Figure 2.10 from AMS 600-13.

U.S. Manufacturing Economy (9)

U.S. Manufacturing Economy (10)

Manufacturing Safety, Compensation, and Profit

  • Compensation
    • As seen in Figure 4.5, employee compensation, which includes benefits, has had a five-year compound annual growth of -0.1 %.
  • Profit
    • Nonfarm proprietors’ income for manufacturing has had a five-year compound annual growth rate of -8.4%.
    • Corporate profits have had a five-year compound annual growth of 10.4 %.
  • Safety
    • Fatalities have a five-year compound growth rate of -3.8 %.
    • Injuries have a five-year compound growth rate of -3.1%.
    • The injury rate has a five-year compound growth rate of -1.7 %

U.S. Manufacturing Economy (11)

U.S. Manufacturing Economy (12)

Manufacturing Assets and Supply Chain

  • In 2021, U.S. manufacturing imported 20.4 % of its intermediate goods/services, resulting in 12.4 % of the output being of foreign origin.
    • The largest supply chain entity for U.S. manufacturing by country is itself (83.0 %) followed by Canada (3.1 %), China (1.8 %), and Mexico (1.5 %).
  • In 2017, the U.S. manufacturing industry had $661.8 billion in assets in the form of buildings and structures with another $2645.6 billion in machinery and equipment.

U.S. Manufacturing Economy (13)

For more information, please see NIST AMS 100-49and the Manufacturing Cost Guide.

U.S. Manufacturing Economy (14)

Buildings and Construction, Building economics, Manufacturing, Machining, Manufacturing economics, Supply chain and Sustainable manufacturing

Contacts

  • Douglas Thomas

    douglas.thomas@nist.gov

    (301) 975-4918

Created January 24, 2020, Updated December 5, 2023

U.S. Manufacturing Economy (2024)

FAQs

How much of the US economy is manufacturing? ›

Manufacturers in the United States account for 10.70% of the total output in the country, employing 8.41% of the workforce. Total output from manufacturing was $2.5 trillion in 2021.

Why manufacturing in the US is good? ›

Shortened Lead Times. By manufacturing your products in the United States, you're not just saving money on logistics costs — you're also saving time in the production process. If products don't have to travel as far to reach their intended retailer or distributor, they can reach the customer quicker, as well.

Has U.S. manufacturing declined? ›

The number of manufacturing jobs in the United States, which had been relatively stable at 17 million since 1965, declined by one third in that decade, falling by 5.8 million to below 12 million in 2010 (returning to just 12.3 million in 2016).

Why is there so little manufacturing in the US? ›

Manufacturing did not decline due to economic evolution or other externalities. Instead, manufacturing declined due to conditions we created in the United States. Ultimately, the root cause of the decline in American manufacturing is that it was left adjacent to the new American system of innovation after WWII.

Is the US still a manufacturing based economy? ›

SUMMARY: In terms of value added, the primary measure of economic activity, the U.S. is the second largest manufacturing nation in the world behind that of China. The U.S. ranking as a brand suggests that it tends to be a differentiator rather than a cost competitor; however, a number of nations rank higher as a brand.

What is the biggest contributor to the US economy? ›

Like most other developed nations, the U.S. economy is largely based on services. Service-based industries, including professional and business services, real estate, finance, and health care, make up the bulk (70%) of U.S. GDP.

Is U.S. manufacturing increasing or decreasing? ›

Manufacturing employment decreased by 4,000 in February, declining for the first time since October 2023. Job growth in the sector has been more sluggish over the past year, on a month-by-month basis, yet remains well above pre-pandemic levels with 12,964,000 manufacturing employees in February 2024.

Does the US still manufacture anything? ›

Heavy Engineering, Industrial equipment, aircraft, weapons, building materials and other high value, high tech products are still being manufactured in the US.

Where does the US rank in manufacturing? ›

Accounting for nearly 16 percent of global manufacturing output in 2021—second only to China, which has four times the population of the United States—the US had a greater share than Japan, Germany, and South Korea combined. By itself, the US manufacturing sector would constitute the world's eighth‐​largest economy.

Is U.S. manufacturing making a comeback? ›

Amid continuing mixed signals about the economy, one notable bright spot is the revival of U.S. manufacturing. The surprising strength of this once-battered sector holds promise for reenergizing the U.S. economy overall, and despite troubles in Europe, its new vigor may provide a boost to the global economy.

Is U.S. manufacturing leaving China? ›

Many US companies are moving production to democratic nations, leaving Beijing furious. In February, Apple's largest manufacturer Foxconn announced that it would open a new factory in India.

Is US bringing manufacturing back to the US? ›

The U.S. government is significantly investing in incentives to bring manufacturing back stateside. These initiatives include financing domestic manufacturing, expanding access to capital for small manufacturers and maintaining technological leadership.

Which US state has the most manufacturing? ›

With 22,255 manufacturers employing 1,350,085 manufacturing workers, California is the nation's largest manufacturing state. A hotbed for innovation, electronics is California's largest industrial sector, home to top companies such as Tesla, Raytheon, Northrop Grumman, and General Atomics.

Which US city has the most manufacturing? ›

The full list can be seen below. According to Manufacturers' News, Houston takes the top spot for industrial employment with 228,226 manufacturing jobs, followed by New York with 139,127 jobs, Chicago with 108,692 and Los Angeles with 83,719.

What does America actually produce? ›

The highest dollar values of the domestic content of gross output in manufacturing were in the food and beverage and tobacco, chemical, and motor vehicles, bodies and trailers, and parts industries. The distinction between the U.S. content of what we produce and consume is stark.

What percent of the US works in manufacturing? ›

Concentration of manufacturing employment (location quotient) by state, private industry, 2022
AreaLocation quotientManufacturing share of total employment
Rhode Island0.989.5
Oklahoma0.9610.2
Washington0.899.0
California0.888.7
51 more rows
Oct 6, 2023

How much does manufacturing contribute to the economy? ›

1. Manufacturers contributed a record $2.89 trillion at the annual rate to the U.S. economy in Q4 2023. 2. For every $1.00 spent in manufacturing, there is a total impact of $2.69 to the overall economy.

What makes up most of us' GDP? ›

Consumer spending generally comprises close to 70% of GDP; the retail and service industries are critical components of the U.S. economy.

What percent of the US workforce is employed in manufacturing? ›

Manufacturers in United States account for 10.94% of the total output in the state, employing 8.58% of the workforce.

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