Manufacturing is an powerful driver of economic wealth. For years I have been providing data to counter the contention that the manufacturing base of the USA is gone and the little bit left was shrinking. The latest data again shows the USA is the largest manufacturer, and manufacturing in the USA continues to grow. It is true global manufacturing has begun to grow more rapidly than USA manufacturing in the last few years. I doubt many suspect that the USA’s share of manufacturing stayed stable from 1990 to 1995 then grew to 2000 took until 2006 to return to the 1990-1995 levels and then has declined in 2007 and 2008 a bit below the 1990 level and during that entire time was growing (even in 2007 and 2008).
The USA’s share of the manufacturing output, of the countries that manufactured over $185 billion in 2008, 28% in 1990, 28% in 1995, 32% in 2000, 28% in 2005, 28% in 2006, 26% in 2007 and 24% in 2008. China’s share has grown from 4% in 1990, 6% in 1995, 10% in 2000, 13% in 2005, 14% in 2006, 16% in 2007 to 18% in 2008. Japan’s share has fallen from 22% in 1990 to 14% in 2008 (after increasing to 26% in 1995 then steadily falling). The USA has about 4.5% of the world population, China about 20%.
Based on the latest UN Data, for global manufacturing, in billions of current US dollars:
* I am using the data from last year that separated the manufacturing data (this year the data does not provide separate manufacturing data for China) instead of that shown in the most recent data (which doesn’t separate manufacturing)
** The China data is not provided for manufacturing alone. The percentage of manufacturing (to manufacturing, mining and utilities) was 78% for 2005-2007 (I used 78% of the manufacturing, mining and utilities figure provided in the 2008 data).
I hope to write a series of posts examining global manufacturing data including looking at manufacturing data specifically (excluding mining and utility data).
This data through 2008, does not yet show the effect of the large worldwide recession: the 2009 data will likely show a global decline.
This data cannot be seen as perfectly accurate, but it is very interesting. Also this data is in current US dollars so historical data changes compared to our past posts (in addition I wouldn’t be surprised if data is updated based on information not available a year earlier – but I don’t see any explanation of if that is done). Still it provides a useful view of global manufacturing activity, especially since there is so many misconceptions about the decline in USA manufacturing.
The decline in USA manufacturing has been trumpeted as a completed fact for decades. It is true, especially China, is gaining large amounts of manufacturing production. But it is only in the last few years (say since 2006) that the USA’s share of global manufacturing is declining.
Such a short term decline, is hardly guaranteed to continue for the long term. But, I think it fairly likely that China will continue to grow. And it is reasonable to guess (based on the recent data, the current situation and trends) that the USA’s proportion of global manufacturing will decline going forward.
However it is likely that USA manufacturing will actually continue to grow – in the face of decades of claims that the USA’s manufacturing base is gone and decreasing. The evidence clearly shows this has not been true no matter how often people repeat the claim.
Manufacturing jobs continue to decline globally. As USA manufacturing jobs decline many leap to the conclusion that the USA manufacturing base is disappearing: which is not true. It is questionable that the USA is loosing more manufacturing jobs than other countries. The data is sparse but I believe by far the largest factor is declining manufacturing jobs globally. If the USA is losing more manufacturing jobs than others, that is a minor factor compared to the overall trend of decreasing jobs globally.