The U.S. Is Still the World's Top Manufacturer

by: Mark J. Perry
We hear all the time about the "decline of U.S. manufacturing" (84,000 Google hits) or even more drastically, about "the death of American manufacturing" (15,400 Google hits).

The chart above shows the U.S. share of world manufacturing output, annually from 1970 to 2009, based on data from the United Nations. There has been a recent decline in America's share of world manufacturing output, from 25.3% a decade ago in 1999 to 16.82% in 2008, but note several important facts about the chart:
1. The U.S. share of world manufacturing output was amazingly constant between 1970 and the early part of this decade, and as recently as 2006 was above 20%. It sure seems like we've hearing about the "decline of U.S. manufacturing" for the last several decades or longer, when the factual evidence suggests that it's actually only a very recent phenomenon - at only when measured by our share of rising global manufacturing output. Given the recent phenomenal economic and manufacturing growth in places like China, Brazil, India, Russia, and Korea, among others, it would only make sense that our share of world factory output has declined in recent years (but notice it did jump up a bit 2009).
2. In terms of the total amount of manufacturing produced in a year, the United States still leads the world in annual manufacturing, see chart below for the 2009 rankings of the top seven countries in the world for factory output.

In 2009, the United States produced almost 14% more manufacturing output than second place China, and produced almost as much ($2,334 billion) as Japan, Germany, Italy, France and the U.K. combined ($2,762 billion).

3. Although it's true that the U.S. has lost more than 7 million manufacturing jobs, from an employment level of more than 19 million manufacturing jobs in the late 1970s to fewer than 12 million jobs today, that's happened at the same time that U.S. manufacturing output has continued to expand and grow. In 2009, the U.S. produced more manufacturing output, $2.334 trillion, than ever before in history (in nominal dollars), see chart below.

Bottom Line: The stories about the "death of America's manufacturing sector" have been greatly exaggerated.