While traditional measurement methods suggest that US manufacturing is responsible for only 11% of U.S. GDP, MAPI’s research reveals this is not the case.
By taking a more comprehensive look at manufacturing’s total value chain—not just what happens on the factory floor—we find that the sector supports about one-third of U.S. GDP and employment.
How Important is U.S. Manufacturing Today?
How important is US manufacturing today?
A lot of people think nothing is made here anymore.
But they’re wrong.
products designed and made in America touch every aspect of our lives, our homes, our businesses, our schools, our hospitals, our churches.
They make possible everything we do.
Whether we area driving, exercising, reading, eating, sleeping, or simply lying on a beach.
In fact, the US manufacturing sector is much much bigger than you might think.
Official statistics tell up manufacturing represents 11% of today’s economy, and 9% of the American workforce.
But this underestimates the sectors full impact.
To measure the actual manufacturing value chain look at the whole process of getting a product to market.
It starts with a manufacturers upstream supply chain.
Miners, scientists, engineers, specialized suppliers, transportation firms, and other service providers are all involved in the prep for the factory floor.
A lot of labor skills, energy, resources, services, and process management goes into making the product in the factory.
Then once the product is sitting on the loading dock a large downstream sales chain jumps into action to ensure its available for customers to buy.
These include wholesalers and distributors, specialists in logistics, more transportation firms, professional service providers, and retail stores.
All in all, manufacturing’s value chain is much larger than official statistics suggest.
It actually accounts for more than 1/3 of the U.S. economy.
The people who work in this value chain represent 1/3 of the countries workforce..
Just as important, manufacturing’s value chain has enormous impact on society.
For every $1 of manufacturing value created here, $3.60 in additional economic activity is generated across the rest of society.
No other sector can match that.
Put another way, each manufacturing job created in this country lead to 3.4 jobs in non-manufacturing industries to take a product from start to finish.
So, next time someone says, “We don’t make anything here anymore.”, set them straight.
US manufacturing is vast, and remains one of the most influential sectors in our 21 century economy.
Although the data published in this infographic titled “Measuring America” from the US Census Bureau is sourced several years ago (2011-2012), it paints an accurate picture of how manufacturing in the US contributes and affects the American economy.
US Manufacturing Data Points
Some of the more interesting data points to consider about mfg in the US:
- The sector is the fourth largest employer in the US
- The average yearly payroll is $53,500
- The sector employed 11.2 million workers in 2012
- The combined annual payroll was $598.6 billion dollars
US Manufacturing by the Numbers
- 4th largest employer in the United States.
- The average annual payroll is $53,500.
- Employed 11.2 million workers in 2012.
- Top industries include:
- Food mfg
- Fabricated metal product mfg
- Transportation equipment manufacturing
- Machinery mfg
- Computer and electronic product manufacturing
- Chemical manufacturing
- Plastics and rubber products manufacturing
- Miscellaneous mfg
- Printing and related support activities
- Primary metal manufacturing
The US Manufacturing base is incredibly diverse and provides a strong base for economic and career opportunities.
In spite of the fact that material production in the US has been in a 40 year decline, many economists and analysts consider the manufacturing sector the “backbone of the American economy.”
US Manufacturing Drives the US Economy
Key points to understand about US manufacturing
- It supports more than 17.6 MILLION US jobs.
- For every dollar spent on manufacturing in the US, $1.37 in created
- It accounts for 12% of the Gross Domestic Product in the US
- It is the 9th largest economy in the world.
- It offers a wide range of career opportunities
- Entry level salaries for mfg engineers are nearly $60,000 per year
- The average salary for skilled mfg workers in the US is more than $77,000 per year
The US Manufacturing Industry: What Does it Look Like?
The manufacturing industry in the US, whether you realize it or not affects every man woman and child in the USA.
What does manufacturing look like?
This infographic that was produced by National Institute of Standards and Technology provides insight into “what manufacturing really looks like” in the United States and why it is such a powerful sector of the economy.
Well, for one it looks like a multitude of manufacturing companies, some you would recognize at first glance and some you wouldn’t.
Companies with names like General Motors, Caterpillar and Ocean Spray are manufacturing products and consumables everyday that add to the fabric of our daily lives.
What are these companies manufacturing?
Computer tech, precision metal components, heavy equipment, food and beverage, planes, trains, automobiles and much more.
In fact if the US manufacturing sector was it’s own country, it would be the ninth largest economy in the world.
In addition, manufacturing makes up nearly 12% of the US Gross Domestic Product or total economic activity employing and supporting over 18.5 million jobs.
One reason manufacturing thrives in the US is because it is profitable.
For every dollar spent on manufacturing, $1.40 is added to the US economy.
What kind of jobs are available in manufacturing?
The manufacturing industry employs a wide variety of skills and talents and relies on all of them to get the job done.
Here is a sampling of careers that are available in the manufacturing field today:
- Human Resources
- Operations Managers
- Computer Programmers/IT
But what is really impressive is the fact that the entry level salary for a manufacturing engineer is nearly $60,000 per year and the average salary is closer to $77,000.
The public face of manufacturing is changing.
In the past the public has viewed manufacturing jobs as ‘sweaty and repetitive’ work, but the industry is striving to change this public perception with programs such as ‘Manufacturing Day’ that reach out to students, educators and business, public officials and demonstrate the virtues and value of a career in manufacturing.
So in conclusion, what does manufacturing look like?
It looks like prosperity.
It looks like self-reliance.
Manufacturing looks like a vital component of the US economy, creating stable jobs and quality products.
What does the US Manufacturing Industry Look Like?
Survey Reveals Common Misconceptions About Manufacturing Careers
What is the current perception of US manufacturing companies as seen by those in the ‘millennial’ generation?
That’s a great question.
While it is commonly known that the US has been built upon a manufacturing economy, in recent years our country has begun to rely heavily on imported goods.
This has drastically effected the way in which young people view the manufacturing industry.
While most don’t understand specifics of modern manufacturing, many are aware of the economic benefits of a manufacturing economy.
US Manufacturing Companies, Here’s the Facts
Interesting Facts About Manufacturing:
- Manufacturing supports 17.4 million jobs in the US.
- In 2002 manufacturers contributed $2.03 trillion dollars to the US economy.
- Including pay and benefits the average manufacturing worker in the US earns $77, 505 annually.
- 18-24 year olds rank manufacturing rank manufacturing 5 out of 7 for career preferences… but more than 80% believe that it is important to out economy and standard of living.
Jeffery Krause is the CEO of SME an organization that promotes the manufacturing industry was recenlty quoted saying “The landscape in advanced manufacturing has evolved. A serious misconception is that manufacturing is dirty, dark or dangerous; and isn’t seen as an optimal career choice. The reality is far from that.”
Survey Results Show Parental Misconceptions of Manufacturing Careers
SME surveyed parents nationwide to assess their views on manufacturing as a career. Some findings include:
- More than 20 percent of parents surveyed view US manufacturing companies as an outdated and/or dirty work environment.
- Half of all respondents do not see manufacturing as an exciting, challenging or engaging profession.
- Nearly one-quarter of parents surveyed do not feel that manufacturing is a well-paying profession.
Dispelling the myths
- Many of today’s manufacturing environments look more like clean rooms, with laboratory-like settings.
- Manufacturing offers career opportunities for every education level ranging from skilled trades that require a high school diploma or GED to engineers, designers and programmers with bachelor’s and master’s degrees and researchers and scientists with PhDs.
- Technological advancements are yielding well-paying careers – the average U.S. manufacturing worker makes $77,506.
- The use of 3D design and computer-aided engineering software is attracting students interested in non-traditional careers such as game design and animatronics.
Other industry truths
- Many advances are taking place in additive manufacturing. That includes 3D printing, which has been used to create everything from aircraft parts to custom medical devices. The global 3D printing market is expected to grow from $1.6 billion in 2015 to $13.4 billion in 2018.
- For every $1 spent in manufacturing, another $1.37 is added to the economy – the highest multiplier effect of any economic sector.
- An estimated 3.5 million manufacturing jobs will become available in the next 10 years – but without the right skilled workers for the jobs, an estimated 2 million of those jobs could go unfulfilled.
Reshoring US Manufacturing: It’s a New Dawn for America
Reshoring US manufacturing is a hot topic.
It seems we hear the term quite a bit in the news lately, and rightly so.
The Trump administration has recently been putting extra pressure on firms that choose to relocate or operate overseas through his “Make America Great Again” program.
Even with pressure being applied by the current administration, there are many corporations who still operate overseas.
Reshoring Has Slowed But Hasn’t Stopped
Some companies that have repatriated manufacturing jobs in recent years include prominent household names, such as 3M, Armstrong World Industries, Boeing, Caterpillar, Coleman Manufacturing, Emerson Electric, General Electric, Google, Master Lock, Microsoft, Navistar International, Oracle, and Peerless Industries. And there are smaller, lesser-known companies, such as Tungsten Heavy Powder & Parts.
There are a number of benefits to in-sourcing manufacturing back to the United States. 60% of OEMs and manufacturers use “rudimentary total cost models” and ignore as much as 20% of the costs of offshoring (according to a 2009 Archstone Consulting survey). If you are not accounting for 20% of YOUR costs to offshore — offshoring may NOT be the most economical decision. And in times of a tough economy and tougher competition, no one can afford that.
The Reshoring US Manufacturing Initiative
The Reshoring Initiative has released a new info-graphic titled “New Dawn for Manufacturing Careers in America” in order to help support Manufacturing Day 2016.
IT highlights a few key facts:
- The wage gap between the US and China is steadily shrinking
- Companies are starting to use total cost of ownership (TCO)
- US is no longer losing jobs to offshore
The info-graphic also goes over the top 10 reasons companies are reshoring US Manufacturing:
- Quality/rework/warrant work
- Freight cost
- Rising wages offshore
- Government incentives
- Skilled workforce availability/training
- Lead time/time to market
- Eco-system synergies/localization
- Proximity to market/customers
- Image/brand: Made in USA
New Dawn for Manufacturing Careers in America Infographic
US Manufacturing: What the Insiders Are Saying
To get a better idea of what is happening inside the USA Manufacturing sector, it can sometimes help to get an insider’s opinion.
Three such leaders in the industry today are Jeffrey R. Immelt, David N. Farr, and Mary Andringa.
All three hold important positions that pertain to USA manufacturing and ultimately their words give us a peek into what the industry requires in order to continue to thriving and being competitive in a global marketplace.
US Manufacturing Quotes
Jeffrey Robert “Jeff” Immelt is an American business executive. He is currently the chairman of the board and chief executive officer of the U.S.-based conglomerate General Electric. Wikipedia
“If we’re really serious about higher growth in America, then we have to own the future of manufacturing. The sector is going through an incredible period of change. American manufacturing is coming back, and that could produce the middle class for a whole new generation.”
—Jeffrey R. Immelt, Chairman and CEO, General Electric Company
Emerson CEO David Farr
David Nelson Farr is the chairman and CEO of Emerson Electric Company, a Fortune 500 company. Farr has worked at the company since 1981. He is married with two children and is a resident of Ladue, Missouri. Wikipedia
“Emerson and our 115,000 employees can make sales abroad and support jobs here at home in America when we have a level playing field. Companies of all sizes and shapes want and need the chance to enter new markets in a free and fair way.”
—David N. Farr, Chairman and CEO, Emerson
Vermeer Corporation Chair of the Board, Mary Andringa
Mary Vermeer Andringa is president and CEO of Vermeer Corporation in Pella, Iowa. Vermeer is an international, family-owned agricultural, construction, environmental and industrial equipment manufacturing company with over 2,500 employees worldwide. Its products are used in more than 70 countries.
“Comprehensive tax reform is essential for manufacturing’s continued success in America. The United States has the unfortunate distinction of imposing the highest corporate tax rate in the developed world. Imagine the expansion, investment and innovation we could unleash in America if we were more competitive with other nations.”
—Mary Andringa, Chair of the Board, Vermeer Corporation and Past NAM Board Chair
Call Aajogo Today (480) 966-3952 for a free quote!