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Sunday, November 13, 2011

Did YOU make that?

I am sure all of you have heard someone in the last year comment about how America doesn't make anything anymore. You may have even said it yourself. I have come across some interesting figures (at least to me - I love numbers!) about that.

What if I told you that manufacturing output, measured in dollar value, was at its HIGHEST in 2010. OK, I am telling you that. It's true. The U.S. manufacturing output was a record 1.7+ trillion dollars last year. How is that possible? We don't make anything anymore! (FYI, I have found some other figures that show the manufacturing output for the U.S. much higher - over $2.3 Trillion last year. So, it may be even "better" than I have presented. I am going with my original research however. I did want you to know.)



First, obviously we do make "things". One of the reasons that people feel that we don't is the fact that there are a LOT less people employed in manufacturing jobs than there were even at the turn of the century a little over ten years ago. We all know of people who worked in manufacturing that have lost their jobs or factories that have closed (at least around here). In 2000 there were approximately 17 million manufacturing jobs in the U.S. In 2010 that number had dropped to under 12 million - roughly a 30% drop.
The peak of manufacturing jobs was just prior to the 1980s recession (yes there have been others!). There were around 19 million people working in manufacturing jobs. Their output in dollar value was a bit over 500 billion dollars (half a trillion would be a good number to remember), or a little over $26,000 per employee. In 2010 the number of jobs was 11.53 million. Their output per employee was an astonishing $149,000+! That is a total manufacturing output of 1.72 TRILLION (remember the half a trillion from above). FYI, that makes us the top manufacturing country when measured in dollar volume output. China is number two, and rapidly advancing. However, their productivity (output per worker) is not even in the same league. Also, they have their own labor problems arising. The average wage in China has risen from less than 1,000 yuan per year in 1980 to over 26,000 yuan annually in 2010. China will need to get much more efficient to continue their growth. But, that is another subject.

So, you can see by the numbers that the U.S. does still manufacture "things", and a lot of them. So, what are those "things"? The top "thing" is production and manufacturing equipment. We make things to make other things. We are exporting our efficiency in the form of machines to others so they can make goods cheaper. Industrial supplies are also big. These are the materials to run the machines along with spare parts and maintenance gear. Then a catch-all - consumer goods. I know we think we get all our consumer goods from China. But, the U.S. manufactures a lot of consumer goods. We export a lot of them as well. (in fact industrial exports are at an all time high as well - in dollar value) Then comes one most would think of - automobiles and auto parts. Then comes aircraft and parts. The U.S. still builds a lot of planes. Both for domestic use and to export to other countries. Aircraft is still a great U.S. product even with the AirBus people and the Brazilians and Canadians building all those regional jets.

Bottom line - the U.S. is still a great manufacturing nation. We do not employ nearly as many people, but that is what allows us to be competitive even with our wages. So, if you hear someone saying "America just doesn't make anything any more" - you can set them straight.