#376. Manufacturing’s Bright FuturePosted on
MANUFACTURING’S BRIGHT FUTURE
We continue to be dismayed at how the national media downplays the manufacturing sector in the USA. Listening to the typical talking heads on TV or reading some of the economically-challenged journalists in the popular press, would have you believe that all manufacturing jobs in this country are doomed and moving to China. We beg to differ in both the current situation and the outlook for the future.
The media largely stresses the loss of manufacturing jobs. And, while it’s true, manufacturing employment in this country peaked in the ’70s, what is not generally known is that manufacturing production in the USA has marched upward on an annual basis, hitting a new record in 2008. We are making more products each year but with fewer workers due to the incredible advances of productivity in manufacturing. While production fell dramatically in 2009, it has rebounded nicely from those depths and manufacturing production in this country was up for 29 straight months through December 2011, close to a new record in 2011.
The manufacturing output of the USA is so strong, that it is as much as the bottom five on the graphic to the right (Germany, U. K., Italy, France and Korea) plus the next three countries not shown (Russia, Brazil and Canada) COMBINED! Taken alone, the USA manufacturing sector would be the eighth-largest economy on Earth. Only China appears likely to give the USA a run for its money in the manufacturing sector, but it requires 10 TIMES as many workers to produce their output when compared to the USA.
Three subsets of employment data correlate very well with the demand for increased industrial space: manufacturing, wholesale trade, and transportation. During the boom years of 2005 through 2007, while the U. S. economy was adding 5.7 million new jobs, these three categories only accounted for 39,000 new jobs. During the Great Recession of 2008 and 2009 they accounted for a loss of 3.2 million jobs out of the 8.7 million jobs lost. However, in 2010 and 2011 they accounted for a net new job gain of 575,600 out of the 2.6 million jobs added in those two years, with manufacturing jobs accounting for 334,000! You have to go back to 1997 to find a year when the U. S. added jobs in the manufacturing sector, much less two years in a row.