US still world's biggest manufacturer but China gains: study

[Hannah Bell]

US still world's biggest manufacturer but China gains: study
Published: Wednesday October 7, 2009

The United States remains the world's largest manufacturing nation even as China gains ground, according to a new study.

The survey released Tuesday by the US-based Manufacturing Institute with the Manufacturers Alliance showed that the US share of global manufacturing value has held at 22 percent in 2008, roughly the same level for nearly 30 years.

China's share last year was 14 percent, continuing a surge from its 1980 level of just two percent, according to the study using data from the United Nations, International Monetary Fund and other sources.

The US manufacturing generated 1.64 trillion worth of goods in 2008. Although the value has been rising, industrial output's share of gross domestic product has fallen from 20 percent in 1980 to 11.5 percent in 2008, the report showed.

"A common misconception is making the rounds: that domestic manufacturing is vanishing," the report stated. "This misperception is based on consumers? daily observation of foreign-made products visible on store shelves and the media's focus on the loss of jobs in the sector. But the facts do not support this pessimistic view. Manufacturing in the United States remains vital and important to the US economy and is globally competitive..."

"The United States has the largest manufacturing economy in the world, producing 1.6 trillion dollars in goods annually. America's global market share of manufacturing has held steady at around 22 percent for 30 years...And one in six US jobs is in or directly tied to manufacturing, which still pays premium wages and benefits."

In terms of manufacturing exports, however, the United States is the third largest after the European Union and China, and ahead of fourth place Japan, the report showed.

In terms of global market share of manufactured exports, the US share declined from 19 percent in 2000 to 14 percent in 2007, while the Chinese share rose from seven percent to 17 percent, according to the data.


http://rawstory.com/news/afp/US_still_world_s_biggest_manufactur_10072009.html

[On the Road]

1. Now That is Interesting

China's manufacturing boom has NOT come at the expense of the US. So whose share has China been taking?

(Just wanted to post something before the inevitable comments on how there is no longer any manufacturing being done in the US.)

[Hannah Bell]

3. for consumer exports, it has - but not only the us. for other categories,

less so.

for example, i've read the us still produces as much steel as it did in the heyday of "big steel". just with 99% fewer workers, due to tech advances.

[Statistical]

10. Bingo. Productivity advances are a double edge sword.

Just compare number of people required to feed 100 people with the same number 100 years ago and 1000 years ago.

As productivity increased for agro the number of people a single farmer could feed skyrocketed thus the number of farmers needed plummeted. Farm output today is massively higher than say 200 years ago despite having 90% less farmers.

[jmowreader]

8. China is the "least expensive nation" du jour

Consumer products are made in the least expensive nation, because sadly enough consumers don't seem to care whether the thing falls apart in a year. OTOH, someone buying a piece of equipment for her factory really cares whether the item will be taken to the junkyard before it depreciates all the way out, and that when you tell the thing to cut .010" off something it's not really going to cut .006 or .014 instead. This means most heavy equipment is made in the US or Europe, and shoes are made in China.

[napi21]

2. WHAT are we manufacturing? Coke, Pepsi, weapons, airplanes,

and BS! I din;t buy this story. Yes we still make cars, but far less than we used to. I don't think you can find a TV, cell phone, computer (maybe a Dell), a piece of clothing, the MS keyboard I'm typing on was made in China along with the optical mouse! What are we making that is supposed to be keeping that Mfg. at 20%????

[Statistical]

4. Why because it doesn't fit the tired "US doesn't make anything" meme?

The US is either the world leader or major producer of
steel
aluminum
chemicals
locomotives
turbines (like for powerplants)
industrial equipment (think caterpillar)
heavy trucks
autos
nuclear reactors (over half of all reactors in the world were built in US)
aerospace
weapon systems
satellites
rockets (got to get the sat into orbit somehow)
semiconductors
medical equipment (cat scans, MRI, xray, etc)
food processing (yes food is agriculture but food processing is considered manufacturing, hotpockets, etc)
petroleum products (often overlooked but US is 3rd largest oil producer, and 2nd largest oil refiner)
computer/servers
networking equipment (the entire internet backbone worldwide is based up of switches by 5 companies - all US)
cellular communications (the cellphones may be made in China but the multimillion dollar antennas, radios, and backhaul equipment aren't, Nokia - Finland, and Motorola US are the two leaders).

Part of the problem with manufacturing has been JOBS not total output. In last 20 years there have been massive productivity gains in manufacturing so the same amount of goods can be made with less people. Good for the company, good for trade, good for US production capacity, good for the consumer, crappy for the person who isn't needed. Jobs have been destroyed mainly as a result of productivity gains. Most of these industries are mature and stable. The number of cars demanded per year is never going to double or triple again. So the excess jobs likely will never come back.

[napi21]

5. From that list it appears that almost everything on it is NOT

a consumer product, as in everyday people comsumers. THAT's why most people believe that the US has lost it's edge in mfg. All they see and almost everything they buy is Made somewhere else!

[pampango]

7. Exactly. If everything that I buy is made elsewhere, my perception is that the US doesn't make

anything anymore. As far as my perception is concerned, it really doesn't matter that the US makes plenty of stuff that other people (or companies or countries) buy. I don't see those products, at least not on a daily basis.

I know, on some level, that somebody makes steel, airplanes, construction equipment and non-consumer products like them, but those don't impact me on a daily basis like toys, TV's and telephones do.

[Pavulon]

14. That is low end consumer trash, you are impacted by the steam turbine

at your local power plant. You are impacted by the boeing jet and medical technology made here, or in a country where quality is a concern. Japan, germany, US, if your life depends on it, i prefer it come from one of those locations.

[pampango]

19. Oh, I agree with you. The US being a leading manufacturer of heavy machinery, planes,

precision equipment and all the other products that have been listed, which require highly skilled (and highly paid) workers, is undoubtedly more sustainable and dependable than countries that rely on a low-wage, unskilled labor force.

My point was more that what people react to is what they see in the stores where they shop. That leads to a mistaken impression of American manufacturing, since most of us never see the turbine at the local power plant or read the label on precision medical equipment or drive a bulldozer or harvester.

[Statistical]

9. US will never be able to compete with low quality, low margin products.

Consumers are notoriously fickle when it comes to price.

Companies on the other hand however tend to look more big picture stuff. A nuclear reactor can cost $6B for a pair of them and will operate for 80 years. You don't want to "save 10%" because the company with lowest bid used unskilled Chinese labor.

I do agree the US doesn't have much consumer presence however it hasn't for a long time. Today it is China, 10 years ago the same goods were made in Mexico. 10 years prior to that it was Korea or Taiwan. Soon China will face competitive pressure from South American countries like Brazil as well as India and Pakistan.

So it isn't US labor vs. Chinese labor in that fight. Even if somehow US labor could compete against Chinese labor for low margin products it would only be a temporary measure. It would be a constant fight against a dozen other low labor countries. Also remember productivity is relatively low in countries like China. China should be able to continue to keep downward pressure on prices while improving wages by increased productivity.

[Pavulon]

15. Vietnam actually low bids them. Shitty shirts now come from there..

the problem is it makes finding a quality shirt harder. They still exist.

[pampango]

11. Great list. Thanks. The real issue is not manufacturing output (which is quite healthy),

but manufacturing employment which keeps dropping as a percentage of the workforce. The gains in manufacturing productivity resulting from the ever increasing use of machines and computers, along with their human controllers, places more of a premium on workers who are highly skilled than used to be the case in past decades in the US, when manufacturing employed a mix of highly skilled and relatively unskilled labor.

[Pavulon]

13. Stuff that is not plastic, sold at walmart, lead tainted disposable trash...

like high quality steel which we use to make the AP1000 reactor. aerospace, cnc tooling, high end material handling systems.

Basically anything that requires more than a bunch of meat puppets churning out crap

[RedRocco]

17. Fast food

they moved fast food into the manufacturing column during *ush

[TexasObserver]

6. Recommend

[SaintLouisBlues]

12. Kick

[TxRider]

16. Not only that but export are up now thanks to a lower US dollar.

It's not all bad having the value of the dollar dip.

[iceman66]

18. Doesn't mean there isn't room for improvement.

The problem is not that were not manufacturing at all, but that there is a trade gap.

[Statistical]

20. The nice thing is that a falling dollar should help the trade gap.

American companies paid for exports in foreign currency (euro, yen, yuan, pound) will receive more dollars which boosts the export side of the equation.