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Is the US a Manufacturing Powerhouse? 0

Posted on 2, November 2018

in Category Blog


Is the US a Manufacturing Powerhouse?/blog

Rexroth is a German company, historically, but the company has a strong presence in the United States. When Rexroth came to the U.S., America was a manufacturing powerhouse. Is the United States still a manufacturing powerhouse?


source: tradingeconomics.com

U.S. production has increased significantly  in the past decade. The most recent figures show that we make $5.4 trillion worth of goods per year. That’s a lot of stuff.

Over the past quarter of a century, exports of American goods have quadrupled.

Employment

How many people work in manufacturing? This is where the American colossus shows weakness. In 1950, 30% of American workers worked in manufacturing. Now it’s more like 8.5%. At the same time, manufacturing is responsible for about 11.6% of total GDP for the nation. The value of manufacturing isn’t perfectly connected with the number of jobs the manufacturing sector provides.

And productivity doesn’t connect with employment numbers at all. As productivity has risen, the nation has lost about five million manufacturing jobs.

The total number of manufacturing facilities has also dropped significantly. We have about 60,000 fewer factories now than at the beginning of the 21st century.

So we have fewer, more productive factories with more automation and fewer workers.

We could conclude that things are better for factory owners and worse for workers — except that we know that manufacturers have trouble filling their job openings. There is a shortage of qualified workers for the modern factory.

The multiplier effect

On the other hand, research shows that the multiplier effect for manufacturing is higher than for other industries. Every $1.00 invested in manufacturing leads to $1.89 spent in the community. Every manufacturing job created leads to four other jobs in the economy.

The Manufacturers Alliance for Productivity and Innovation, which admittedly has a dog in the race, thinks that’s an underestimate. Consider the entire supply chain, the MAPI syas, and the multiplier effect could mean that every dollar for manufacturing adds $3.60 to the economy.

So is America still a manufacturing powerhouse? You could argue either way.

You may be a manufacturing powerhouse, though, no matter what answer you come up with for the USA. When you need support for your Rexroth electric motion control systems, call us right away. We’ll keep you powerful.

 

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