Manufacturing & Engineering Facts

Many people believe that manufacturing is "dying" in the U.S.* That we no longer produce many products.

The fact is, the U.S is still the #1 manufacturer in the world (as of 2011 - http://unstats.un.org/unsd/snaama/dnllist.asp). While China is rising fast in manufacturing output, and will eventually surpass the U.S., it doesn't mean the U.S. is "losing" in manufacturing. China has 1.5 billion people (more than 4 times the U.S. population), a rapidly expanding domestic market, and centralized control of their economy, so we might expect that they would be able to produce more. However, costs are increasing in China and there are studies that indicate more manufacturing will be coming back to the U.S. because of this.

So don't fret, the U.S. will continue to be a major manufacturing force.

1) BCG report talking about how manufacturing jobs are coming back to the US because of rising costs in China.
- http://www.bcg.com/documents/file84471.pdf

2) Interview with Andy Grove (former CEO of Intel) stating that the US should work hard to bring manufacturing jobs back to the US
- http://www.technologyreview.com/computing/38344/

3) Top American Made Cars. (#1 is Toyota Camry made in Kentucky, #2 is Honda Accord made in Ohio)
- http://www.cars.com/go/advice/Story.jsp?section=top&subject=ami&story=amMade0710

4) Can China compete with US manufacturing?
http://curiouscapitalist.blogs.time.com/2011/03/10/can-china-compete-with-american-manufacturing/

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* This perception is driven by a couple of things:

1) Manufacturing employment has declined in recent decades. This is true, but the main driver of this is productivity increases. Overall U.S. output in manufacturing has grown, but due to increased efficienices, the number of workers required to produce this output has decreased.


Economic Policy Institute - http://www.epi.org/publications/entry/bp171/

2) Manufacturing's share of the U.S. GDP has decreased (around 12% in 2011). This would seem to indicate the shrinking impact of manufacturing. But part of that shrinking % is due to the relatively low price inflation associated with manufactured goods vs. other sectors. Think about how much computers, cars, microprocessors, etc. cost compared to 20-30 years ago. For much of the technology sector, prices have decreased (think how much that $500 computer would have cost you 30 years ago)..