The U.S. Manufacturing Sector Is the World’s 10th Largest Economy
Traditional manufacturing has lost a bit of its luster over the years. The spotlight is on new “clean” technologies that embody engineering services as much as they bend metal. In the popular mind, services predominate because the economy has entered a “post-industrial” era. The Great Recession did not help: job losses fell disproportionately upon manufacturing, adding to the erroneous view that almost nothing is made in the United States anymore.
The reality is more nuanced. Manufacturing rebounded from the recession faster than the rest of the economy. The sector is highly profitable and continues to expand. And U.S. industrial wares remain globally competitive, as rising inbound foreign investment testifies.
The product landscape is changing, of course. Some lines of merchandise die when new technologies or changing tastes make them obsolete (think telex machines and typewriters). Others, such as telecommunications equipment and electronics, grow quickly. The bottom line is that the size of the overall manufacturing pie keeps expanding. In the 14 years ending in 2013, industrial production increased more than 30%. In 2013 alone, manufacturers generated almost $2 trillion worth of value-added.
The United States produces the most goods and services in the world. Emerging economies such as India, Mexico, and Poland have been catching up but remain far behind in GDP per capita. Other highly developed economies—including Germany, Italy, and Japan—have trailed the U.S. in economic performance over the past decade. U.S. manufacturing is larger than the entire economies of India, Canada, and Korea. The sector is so huge that if it were a separate country, it would rank as the 10th largest world economy.