USA: World’s Leading Manufacturer

[Dr. Shane]

‘Made in the USA’ still means something

Many of those who talk economic Armageddon intentionally paint an overly pessimistic picture. They claim U.S. factories are outdated. They complain U.S. products are overpriced. They claim that U.S. workers are lackadaisical and overpaid. They warn U.S. companies are unsuited for 21st-century competition in a global marketplace where everyone from everywhere is competing for everything. They claim a lot of things. And much of what they claim isn't true.

As Stephen Manning of the Associated Press acknowledged in a rare "just the facts" story in mid-February, the U.S. "by far remains the world's leading manufacturer," producing goods valued at a record $1.6 trillion in 2007 — nearly double the $811 billion produced a decade earlier. Indeed, the AP writer noted, "For every $1 of value produced in China's factories [in 2007], America generated $2.50." Not bad for a country that doesn't produce anything anymore.

Not only is the U.S. still the world's leading manufacturer, but there are many good reasons that companies will continue to manufacture here and invest in new plants and equipment. According to the Census Bureau's 2007 Annual Capital Expenditures Survey, released on Jan. 22 of this year, U.S. nonfarm businesses invested $1.36 trillion in new and used structures and equipment in 2007, a 3.9 percent increase over 2006. More than $484 billion was spent on new structures alone...

the U.S. leads the world in many high-value fields, producing more than half of the $175 billion in health care technology products purchased worldwide each year, for example. The U.S. also ranks as the world's largest producer of chemicals, selling 11 percent of the global total. And, as the AP reported, we "sold more than $200 billion worth of aircraft, missiles, and space-related equipment in 2007."

In fact, even in the midst of a global recession, the U.S. exported an estimated $1.377 trillion worth of goods last year, according to the authoritative CIA World Factbook. Nearly half of the exports were capital goods: aircraft, computers, electric power machinery, office machines, telecommunications equipment, and the like. Industrial supplies, such as organic chemicals, accounted for another nearly 27 percent. And consumer goods, including pharmaceuticals, and agricultural products accounted for 15 percent and 9 percent, respectively...

Manufacturing companies should still seek low cost. But as we also know, costs aren't everything. In deciding where to manufacture, companies also need to consider other factors, including R&D and engineering capabilities, the availability of raw materials, the accessibility of markets, quality control, intellectual resources and intellectual property-rights protections, management talent, and infrastructure capacity, among others. These are all areas where U.S. companies often have an advantage. And these are all reasons Made in the USA will continue.

[text taken from link]

[Taylor]

Awesome Shane! Thanks for sharing!

[carolaa]

That is interesting. I really hadn't heard much to the contrary. The main concern I've heard is that real wages have not gone up in 30 years, but have gone down.

[Gerr]

And can you give some of these U.S. manufactured items?

Consumer goods:

If I look at TV: made in Japan, Korea, or China.

Mass-consumption stereo: Made in Japan.

Computers: Made in Japan, China, some USA

Cars & Trucks: Japan, Korea, USA, European

Clothes: Made in China, India, Pakistan, Banana Republics

Tools: Made in China, Taiwan

Electric heaters: Made in China

Electronic cables: Made in China

Plates: Made in China

Cereals: USA

Shoes: Italy, China,

Towels: Pakistan, India, China

Ah, yes! Planes, tanks, war equipments!

[carolaa]

Banana Republics?

[carolaa]

Ah, yes! Planes, tanks, war equipments!

Good point. One can find our weapons of war all around the globe. Made in the USA. Aren't we proud?

[Gerr]

Banana Republics?

Usually referring to Central American countries, e.g. Costa Rica, Guatemala, etc.

[Dr. Shane]

And can you give some of these U.S. manufactured items?

[Dr. Shane]

Banana Republics?

Banana republics simply refers to countries that have agriculturally based economies. There are getting to be fewer and fewer of these because of free trade agreements. Free trade agreements spread the wealth from the developed world into the third world.

[fccool]

This graph should speak for itself:

Even this graph is questionable, because of the blurred line that exists today in US between the manufactured products and services.

Service share of GDP is in the %80s. Waving "we're #1" flag does not help anyone acknowledge alarming facts... which should be alarming to anyone with any business sense.

1) Service sector comprises of 80-84% of the Economy.

2) Much of the US manufacturing industry is not stand alone... and is depended on pre-made parts to be assembled in the US. So, although your car was "made" in US... most of the parts may not be. This goes for a great percentage of the manufacturing sector.

Taking blind side to the issue by throwing the dollars amount around is somewhat misleading due to the different ways of measuring the industrial output. You can read how the output is measured here:

http://www.bls.gov/news.release/prod4.tn.htm

The concern here is that comparing Output between countries comparatively may be misleading if looking at the nominal figures instead of real figures.

For example. To make a shirt in Indonesia may take $1. The same shirt may cost $10 to make in the US... US counts it as $10 contribution towards manufacturing share, and Indonesia counts it as $1. It's the same shirt... but the numbers are different.

So, if you look at the nominal US number valued in dollars... you may get a different picture looking at ratios.