The Importance of U.S. Manufacturing

09. Investment in Equipment and Software Drives Demand for Manufacturing

Investment in equipment and software totaled $1.2 trillion in 2012, representing 7.7 percent of GDP (as measured in inflation-adjusted dollars). Inflation-adjusted investment in this area grew by an average annual rate of 3.3 percent from 2000 through 2012, greatly outpacing the average GDP growth rate of 1.9 percent. The strong growth in investment in equipment and software helps explain why productivity growth in the manufacturing sector has been strong. It also provides evidence that the U.S. manufacturing sector is not withering away and will instead continue expanding.

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