The Importance of U.S. Manufacturing

04. Manufacturing Sector Profitability Is Cyclical

Not surprisingly, manufacturing sector profitability is affected by cyclical movements in the economy. Profits as a percentage of stockholders’ equity fell in the four recessions experienced between 1980 and 2012. Nonetheless, aggregate profits and the rate of profitability rebounded with subsequent economic recoveries. Over this period, the rate of manufacturing sector profitability averaged 12.6 percent and aggregate profits reached a record high in 2011. This indicates that most manufacturing industries are presently in sound financial condition.

To Economic Growth

01

The U.S. Manufacturing Sector Is the Ninth-Largest Economy

02

Chemicals Lead Manufacturing in Terms of Output But Not Employment

03

Manufacturing's Multiplier Effect Is Stronger Than Other Sectors'

04

Manufacturing Sector Profitability Is Cyclical

05

Manufacturing Has Improved Living Standards

06

Manufacturing Drives Productivity Growth

07

Manufacturing Sector's Falling Unit Labor Costs Increase Global Competitiveness

08

The Trend in Spending on Goods Depends on the Measure

09

Investment in Equipment and Software Drives Demand for Manufacturing

10

Small Companies Dominate the Industrial Landscape

11

Domestically Manufactured Goods Are Used Throughout the U.S. Economy

12

Manufacturing Makes a Positive Contribution to Most State Economies

13

Business Is the Largest Source of State and Local Funding