The Importance of U.S. Manufacturing

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

Domestically manufactured goods are used throughout the economy, flowing through the goods and services sectors as intermediate materials and then to final purchases via consumers, businesses, government, and exports.
The figure shows the proportion of total manufacturing commodity purchases occurring in each major sector of the economy, illustrating where manufacturing goods are used. Intermediate consumption occurs in the industry sectors because this is where manufactured materials are made into parts and components that are then incorporated into final goods. For example, steel is produced by its own industry and is transformed into auto parts by other manufacturers, and then the metal parts are sold to motor vehicle assemblers. In this scenario, the multiple sales of manufactured goods are all within the manufacturing industry and double count steel—once when sold to auto parts manufacturers and again in the parts sold to assemblers.
The ultimate goal is to sell the goods for final use. An automobile sold to a consumer is classified as a personal consumption. When a car is sold to a business, it is an investment expenditure. Similarly, motor vehicles sold to federal, state, and local governments are sales to government purchasers. The only other option for a final use is for the vehicle to be exported. The sum of intermediate and final uses equals the total supply for manufacturing commodities.

To Economic Growth


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


Chemicals Lead Manufacturing in Terms of Output But Not Employment


Manufacturing's Multiplier Effect Is Stronger Than Other Sectors'


Manufacturing Sector Profitability Is Cyclical


Manufacturing Has Improved Living Standards


Manufacturing Drives Productivity Growth


Manufacturing Sector's Falling Unit Labor Costs Increase Global Competitiveness


The Trend in Spending on Goods Depends on the Measure


Investment in Equipment and Software Drives Demand for Manufacturing


Small Companies Dominate the Industrial Landscape


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


Manufacturing Makes a Positive Contribution to Most State Economies


Business Is the Largest Source of State and Local Funding