Chart of manufacturing production by China, USA, Japan and Germany from 1999 to 2011. The chart was created by the Curious Cat Economics Blog using UN data. You may use the chart with attribution. All data is shown in current USD (United States Dollar).

The story of global manufacturing production continues to be China’s growth, which is the conventional wisdom. The conventional wisdom however is not correct in the belief that the USA has failed. China shot past the USA, which dropped into 2nd place, but the USA still manufactures a great deal and has continually increased output (though very slowly in the last few years).

The story is pretty much the same as I have been writing for 8 years now. The biggest difference in that story is just that China actually finally moved into 1st place in 2010 and, maybe, the slowing of the USA growth in output (if that continues, I think the USA growth will improve). I said last year, that I expected China to build on the lead it finally took, and they did so. I expect that to continue, but I also wouldn’t be surprised to see China’s momentum slow (especially a few more years out – it may not slow for 3 or 4 more years).

As before, the four leading nations for manufacturing production remain solidly ahead of all the rest. Korea and Italy had manufacturing output of $313 billion in 2011 and Brazil moved up to $308 are in 4-6 place. Those 3 countries together could be in 4th place (ahead of just Germany). Even adding Korea and Italy together the total is short of Germany by $103 in 2011). I would expect Korea and Brazil to grow manufacturing output substantially more than Italy in the next 5 years.

The country supposedly growing their manufacturing the most in the last 10 years is Russia, up 375%. Frankly I don’t believe that data accurately reflects reality. China is next, up 346%. Followed by Indonesia up 345.6%, Brazil up 280%, India up 255%, South Korea up 163% and then Germany up 95%. The figures are all in current USD, inflation alone would result in an increase of about 27% for the period. The slowest gains in manufacturing output are the UK (up just 21%), USA up 32%, Japan up 33% and France up 43%.

Chart of manufacturing production from 1999 to 2011 by the 5th through 14th largest manufacturing countries. The chart was created by the Curious Cat Economics Blog using UN data. You may use the chart with attribution. All data is shown in current USD (United States Dollar).

Of course, when looking at economic data all sorts of questions can be raised. My not believing the Russia data, for example. Also even accepting an inflation of 27% for the economy as a whole, for many manufactured goods that may not be very accurate. And using US $ for everyone creates some issues based on foreign exchange movements (so a country could actually produce 10% more in their own currency but if that currency fell 20% against the $ then they would show a 10% decline in manufacturing output). The data has weaknesses that have to be understood. Even so the data is useful and provides a very good long term picture of what is really going on economically.

I actually believe the USA’s 10 year figure is a discrepancy, but we will see how things shape up in the next 5 to 10 years. The USA had some very bad years from 2006 to 2009.

I expect in the next 10 years Indonesia and Brazil will do quite well and have a great shot at being among the tops in this group of the 14 leading manufacturing countries. China will likely do well, but I think growth will slow and it may well fall back from the lead (though likely remain somewhat near the top). India could do well, but their continued failure to address infrastructure and corruption problems make it very challenging. If they successfully addressed those they could easily be in the lead. I doubt they will though, so I expect them to be held back. Mexico has a chance to do very well, though they also have problems to deal with.

A bunch of the leading countries will struggle to grow significantly. The USA, Japan, Germany, Italy, Russia, France, UK, Spain and Canada are not likely to do fantastically. I would expect the USA to be near the top of this group. That leaves Korea as a country I think can outperform all in the previous sentence but to have trouble keeping up with any of the countries in the previous paragraph that don’t create problems for themselves.

Related: Manufacturing Output as Percent of GDP from 1980 to 2010 by Country – Manufacturing Employment Data: USA, Japan, Germany, UK and more, 1990 to 2009 – Top 15 Manufacturing Countries in 2009 – How Accurate is Manufacturing Data? – Top 12 Manufacturing Countries in 2007

The most surprising thing to me about this graph is how stable employment was through 2000. From 1980 to 2000 the most common idea was the USA no longer manufactured anything. This idea was wrong, as I have written about previously: Chart of top 15 countries manufacturing output over time (2009) – Top 10 manufacturing countries in 2006. But I did think employment declined more from 1970 to 2000.

One factor in this perception is that the number of employed people in the USA has continued to grow. So even remaining somewhat stable from 1970 to 2000, as a percentage of the labor force the jobs kept shrinking. The more important factor that played on people emotionally is factories being shut down got much more attention in the news than new jobs being added. So the perception was tons of jobs were being lost and none were being gained.

In 1980 manufacturing jobs accounted for over 22% of USA jobs; by 1990 that fell to 17%, by 2000 to 14% and by 2010 to 10%.

Related: Manufacturing Employment Data: USA, Japan, Germany, UK… 1990-2009 – Chart of Manufacturing Output as Percent of GDP by Country – Federal Reserve Economic Data (data for the included charts)

The chart below shows manufacturing production by country as a percent of GDP of the 10 countries that manufacture the most. China has over 30% of the GDP from manufacturing, though the GDP share fell dramatically from 2005 and is solidly in the lead.

Nearly every country is decreasing the percentage of their economic output from manufacturing. Korea is the only exception, in this group. I would expect Korea to start following the general trend. Also China has reduced less than others, I expect China will also move toward the trend shown by the others (from 2005 to 2010 they certainly did).

For the 10 largest manufacturing countries in 2010, the overall manufacturing GDP percentage was 24.9% of GDP in 1980 and dropped to 17.7% in 2010. The point often missed by those looking at their country is most of these countries are growing manufacturing, they are just growing the rest of their economy more rapidly. It isn’t accurate to see this as a decline of manufacturing. It is manufacturing growing more slowly than (information technology, health care, etc.).

This chart shows manufacturing output, as percent of GDP, by country and was created by the Curious Cat Economics Blog based on UN data. You may use the chart with attribution.

The manufacturing share of the USA economy dropped from 21% in 1980 to 18% in 1990, 15% in 2000 and 13% in 2010. Still, as previous posts show, the USA manufacturing output has grown substantially: over 300% since 1980, and 175% since 1990. The proportion of manufacturing output by the USA (for the top 10 manufacturers) has declined from 33% in 1980, 32% in 1990, 35% in 2000 to 26% in 2010. If you exclude China, the USA was 36% of the manufacturing output of these 10 countries in 1980 and 36% in 2010. China’s share grew from 7.5% to 27% during that period.

The United Kingdom has seen manufacturing fall all the way to 10% of GDP, manufacturing little more than they did 15 years ago. Japan is the only other country growing manufacturing so slowly (but Japan has one of the highest proportion of GDP from manufacturing – at 20%). Japan manufactures very well actually, the costs are very high and so they have challenges but they have continued to manufacture quite a bit, even if they are not growing output much.

India’s manufacturing output as a percent of GDP bounces around a bit this is largely because they were such a small manufacturer (and the rapid and somewhat chaotic growth of their economy in general). India’s economy benefited greatly from information technology and call center jobs for economic growth. Very few other emerging economies have had alternatives to manufacturing to grow their economies quickly.

India still is manufacturing far below their potential for several reasons: poor infrastructure, incredibly poorly functioning bureaucracy standing in the way of manufacturing business opportunities and corruption. Without addressing these issues much more successfully it is hard for me to believe they will become a serious manufacturer (even with huge amounts of available labor and a very large domestic market).

India has been trying to grow their manufacturing output, and has done so in the last 10 years. I do think India can move ahead of England and France but, India’s manufacturing output could also easily be overtaken by Indonesia, Mexico, and others, if they don’t deal with their systemic weaknesses much more effectively.

Of the top 10 manufacturing countries, those with the largest manufacturing portions of their economies in 2010 were: China 32% and South Korea 27.5%. Globally, while manufacturing has grown, other areas of economic activity have been growing faster than manufacturing.

Related: The Relative Economic Position of the USA is Likely to Decline – Manufacturing Data, Accuracy Questions – Top 12 Manufacturing Countries in 2007 – Manufacturing Employment Data: 1979 to 2007 – USA Manufacturing Output Continues to Increase (over the long term)

Those numbers are significantly less than I expected but the concept matches my understanding – that we greatly underestimate the purchasing of USA goods and services.

We have an inflated notion of how large the China macro economic numbers are for the USA (both debt and manufacturing exports to us). The China growth in both is still amazingly large: we just overestimate the totals today. We also forget that 25 years ago both numbers (imports from China and USA government debt owned by China) were close to 0.

We also greatly underestimate how much manufacturing the USA does, as I have been writing about for years. In fact, until 2010, the USA manufactured more than China.

Ok, this figure is a bit misleading. But even if you thrown out the accounting games 1.13/8.9 = 12.7%. That is a great deal. But it isn’t a majority of the debt or anything remotely close. Other foreign investors own $3.5 trillion trillion in federal debt (Japan $1 trillion, UK $500 billion). The $4.6 trillion of federal debt owned by foreigners is a huge problem. With investors getting paid so little for that debt though it isn’t one now. But it is a huge potential problem. If interest reates increase it will be a huge transfer of wealth from the USA to others.

The oil figure is a bit less meaningful, I think. Oil import are hugely fungible. The USA cutting back Middle East imports and pushing up imports from Canada, Mexico, Nigeria… doesn’t change the importance of Middle East oil to the USA in reality (the data might seem to suggest that but it is misleading due to the fungible nature of oil trading). Whether we get it directly from the Middle East or not our demand (and imports) creates more demand for Middle East oil. It is true the USA has greatly increased domestic production recently (and actually decreased the use of oil in 2009). So while I believe the data on Middle East oil I think that it is a bit misleading. If we had 0 direct imports from there we would still be greatly dependent on Middle East oil (because if France and China and India… were not getting their oil there they would buy it where we buy ours… Still the USA uses far more oil than any other country and is extremely dependent on imports. Several other countries are also extremely dependent on oil imports, including the next two top oil consuming countries: China, Japan.

Related: Oil Production by Country 1999-2009 – Government Debt as Percentage of GDP 1990-2009: USA, Japan, Germany, China… – Manufacturing Output as a Percent of GDP by Country – The Relative Economic Position of the USA is Likely to Decline

This employment news is really starting to add up to something good. And this is going on while everyone is worrying about the Euro imploding. Quite remarkable really. Avoiding a much worse result from the too big-to-fail-financial-firms credit crisis is surprising. We are not close to through the mess that we created, but that it hasn’t been much worse is fairly amazing. And that things are going so well now (even with large unemployment problems) is impressive. The huge government debt balances are a very large concern but it wouldn’t be surprising to have those same huge debts and much worse present day conditions (which would add to the debts).

The unemployment rate declined to 8.3%; the rate has fallen by 80 basis point since August. The number of unemployed persons declined to 12.8 million in January. Among the major worker groups, the unemployment rates for adult men (7.7%) and blacks (13.6%) declined in January. The unemployment rates for adult women (7.7%), teenagers (23.2%), whites (7.4%), and Hispanics (10.5%) were little changed. The jobless rate for Asians was 6.7%.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 5.5 million and accounted for 42.9% of the unemployed. Long term unemployment remains a big problem. With a few more months with such strong growth in jobs and that could start to change.

After accounting for the annual adjustments to the population controls, the employment-population ratio (58.5%) rose in January, while the civilian labor force participation rate held at 63.7%.

Professional and business services continued to add jobs in January (+70,000). About half of the increase occurred in employment services (+33,000). Job gains also occurred in accounting and bookkeeping (+13,000) and in architectural and engineering services (+7,000).

Related: USA Adds 216,00 Jobs in March and the Unemployment Rate Stands at 8.8% (March 2011) – USA Unemployment Rate Remains at 9.7% (Feb 2010) – USA Unemployment Rate Rises to 8.1%, Highest Level Since 1983 (March 2009)

In January, health care employment continued to grow (+31,000). Within the industry, hospitals and ambulatory care services each added 13,000 jobs.

In the goods-producing sector, manufacturing added 50,000 jobs. Nearly all of the increase occurred in durable goods manufacturing, with job growth in fabricated metal products (+11,000), machinery (+11,000), and motor vehicles and parts (+8,000). Durable goods manufacturing has added 418,000 jobs over the past 2 years.

Employment in construction increased by 21,000 in January, following a gain of 31,000 in the previous month. Over the past 2 months, nonresidential specialty trade contractors added 30,000 jobs.

Mining added 10,000 jobs in January, with most of the gain in support activities for mining (+8,000). Since a recent low in October 2009, mining employment has expanded by 172,000.

Government employment changed little in January. Over the past 12 months, the sector has lost 276,000 jobs, with declines in local government; state government, excluding education; and the U.S. Postal Service.

The average workweek for all employees on private nonfarm payrolls was unchanged in January. The manufacturing workweek increased by 0.3 hour to 40.9 hours, and factory overtime increased by 0.1 hour to 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up by 0.1 hour to 33.8 hours.

The monthly revisions in job gains (or losses) result from additional sample reports and the monthly recalculation of seasonal factors. The annual benchmark process also contributed to these revisions.

Chart of manufacturing production by the top 10 manufacturing countries (2000 to 2010). The chart was created by the Curious Cat Economics Blog. You may use the chart with attribution. All data is shown in 2010 USD (United States Dollar).

In my last post I looked at the output of the top 10 manufacturing countries with a focus on 1980 to 2010. Here I take a closer look at the last 10 years.

In 2010, China took the lead as the world’s leading manufacturing country from the USA. In 1995 the USA was actually very close to losing the lead to Japan (though you wouldn’t think it looking at the recent data). I believe China will be different, I believe China is going to build on their lead. As I discussed in the last post the data doesn’t support any decline in Chinese manufacturing (or significant moves away from China toward other South-East Asian countries). Indonesia has grown quickly (and have the most manufacturing production, of those discussed), but their total manufacturing output is less than China grew by per year for the last 5 years.

The four largest countries are pretty solidly in their positions now: the order will likely be China, USA, Japan, Germany for 10 years (or longer): though I could always be surprised. In the last decade China relentlessly moved past the other 3, to move from 4th to 1st. Other than that though, those 3 only strengthened their position against their nearest competitors. Brazil, Korea or India would need to increase production quite rapidly to catch Germany sooner. After the first 4 though the situation is very fluid.

Taking a closure look at the large group of countries after top 4. Chart of manufacturing production from 2000-2010.

Chart of manufacturing production by the leading manufacturing countries (2000 to 2010). The top 4 countries are left off to look more closely at history of the next group. The chart was created by the Curious Cat Economics Blog based on UN data. You may use the chart with attribution.

Removing the top 4 to take a close look at the data on the other largest manufacturing countries we see that there are many countries bunched together. It is still hard to see, but if you look closely, you can make out that some countries are growing well, for example: Brazil, India and Indonesia. Other countries (most in Europe, as well as Mexico) did not fare well in the last decade.

The UK had a particularly bad decade, moving from first place in this group (5th in the world) to 5th in this group and likely to be passed by India in 2011. Europe has 4 countries in this list (if you exclude Russia) and they do not appear likely to do particularly well in the next decade, in my opinion. I would certainly expect Brazil, India, Korea and Indonesia to out produce Italy, France, UK and Spain in 2020. In 2010 the total was $976 billion by the European 4 to $961 billion by the non-European 4. In 2000 it was $718 billion for the European 4 to $343 billion (remember all the data is in 2010 USD).

Mexico is left of that comparison (and I would expect them to be below all the others in the comparison – but also substituting them for any of the 4 I would still believe those 4 countries would out-manufacture the European group. Also adding Russia to the Europe group and Mexico to the other group I would also expect the non-Europe group to manufacture more. I actually think Mexico has great potential but they did not have a particularly good decade and need to do a better job to realize their potential (being right next to the USA is a great advantage).

From 2000 to 2010 China grew manufacturing output by 298%. India was next at 232% and Brazil followed with 193%. The UK performed the worst, up just 2%, while Japan was up 5%. The USA was next worst up just 22% for the decade, which while still an increase. For decades there has been all sorts of talk about how the USA doesn’t manufacture anything anymore. This is just false. It is true that manufacturing jobs have been disappearing but this is a global phenomenon (even in countries growing manufacturing very quickly). It is also true the rest of the USA economy is growing faster than manufacturing output over the last few decades and so the percentage of manufacturing compared to the overall economy has shrunk (but this is due to higher growth elsewhere – manufacturing continues to increase). 2011 may actually have been quite a good year for manufacturing in the USA.

Related: Chart of Largest Petroleum Consuming Countries from 1980 to 2010 – USA, China and Japan Lead Manufacturing Output in 2008 – Manufacturing Employment Data: USA, Japan, Germany, UK… 1990-2009 – Top 15 Manufacturing Countries in 2009 –

The last few years I have had to estimate China’s manufacturing output (to separate out mining production), this year the data is provided using the same criteria for each country: manufacturing comprises units engaged in the physical or chemical transformation of materials, substances, or components into new products (see more detail). Economic data is never perfect and when you are comparing between countries it gets even more difficult (and the measurement discrepancies distort the data – compared to the state you are trying to measure). But still the data useful and interesting; understanding it includes some noise.

Chart of output by top 10 manufacturing countries from 1980 to 2010. The chart was created by the Curious Cat Economics Blog based on UN data. You may use the chart with attribution.

China has finally actually taken the lead as the largest manufacturer in the world. Reading many news sources and blogs you may have thought the USA lost the lead a couple of decades ago, but you would be wrong. In 1995 it looked like Japan was poised to take the lead in manufacturing production, but they have slumped since then (still they are solidly the 3rd biggest manufacturer). China has been growing manufacturing output enormously for 20 years, and they have now taken the lead from the USA.

As I have been saying for years the biggest economic story about manufacturing is the dramatic and long term increase of productive capacity in China. The next is the continuing global decline in manufacturing employment: increased productivity has seen production rise year after year and employment fall. What is the next most interesting stories is debatable: I would say the continuing failure to appreciate the continuing strong manufacturing production increases by the USA. Another candidate is the the decline in Japan. Another is the increase in several other counties: Korea, Brazil, India, Indonesia…

Looking more closely at some of the long term data shows how much China stands out. From 1980 to 2010 China increased output 1345%. The total top 10 group increased output 302% (all data is in current USD so inflation accounts for most of the gain, 100 1980-USD equal 280 2010-USD). From 1995 to 2010 China increased output 543%. The group increased 64%. For 1980-2010, the results for the other 3 largest manufacturing countries are: USA up 218%, Japan up 261% and Germany up 148% (other countries doing very well are Korea up 1893% and India up 737%). Looking at the last half of that period, from 1995-2010 the: USA up 44%, Japan down 11% and Germany up 19%.

One thing to remember about adjusting manufacturing data for inflation is that often the products created in later years are superior and cost less. So that a computer manufactured in 1990 which added $5,000 to the manufacturing total is far inferior to one in 2010 that added just $1,000. This point is mainly to say that while the increase in manufacturing in real (not inflated dollars) is not as high as it might seem the real value of manufacturing good did likely increase a great deal. But the economic data is based on price so manufacturing increases are reduced by cost decreases. Computers are the most obvious example, but it is also true with many other manufactured goods.

You can that the other largest manufacturing countries fail to keep up with the increases of the entire group of the top 10. China’s gains are just too large for others to match. If you remove China’s results (just to compare how the non-China countries are doing) from 1980-2010 the increase was 216% (so compared to the other 9 top manufacturers over this period the USA was even and Japan better than the average and Germany was worse). And from 1995-2010 the top 9 group (top 10, less China) increased just 28%: so the USA beat while Japan and Germany did worse than the other 9 as a group.

So you can see even with China growing manufacturing output enormously most other countries are also increasing manufacturing output (no matter how may articles talk about disappearing manufacturing in the USA and Europe), in constant dollars. The growth in output globally has been tremendous – largely driven by growing demand in China, India, Korea, Brazil, Mexico, Malaysia… in addition to growing demand in USA, Japan, Germany, UK, France, Italy… In the next 20 years more of the growth is likely to be in the first group listed in the previous sentence (as well as in Africa, if we are lucky – there are many good signs from Africa in the last 10 years).

Another interesting story, in the long term, is that Europe fell to just 5 of the top 10 countries this year and is likely to lose more. Brazil, Korea and India are not likely to be overtaken. Those three have the fastest growth rates since 1995 (other than China) and look to be in place to continue increasing capacity more than the others. On the verge of breaking through are: Russia, Mexico and Indonesia. Spain, recently replaced by India, doesn’t seem likely to get back into the top 10. France and the UK have the slowest growth rates for 1980-2010 and 1995-2010 (other than Japan from 1995-2010).

Several years ago you started to see stories about manufacturing moving from China to Vietnam or Thailand or some other countries for cheaper labor. I wondered about this so I looked at these countries and the total manufacturing output was lower than the amount China was increasing production by each year. Guess what, that is still true. In 2010 China increased output by $311 billion. Granted that was an enormous increase. So lets look at the average increase over the last 5 years, which is $196 billion.

A country with a total output of $196 billion would be in 12th place (Russia is at $209 billion – then you have $170-180 billion range, including Mexico, Indonesia and Spain). Total manufacturing production by several other countries: Thailand $113 billion, Malaysia $52 billion, Philippines $42 billion, Vietnam $20 billion (yes, barely over 10% of China’s yearly increase).

Can China increase output by $196 billion each year over the next 10 years, I very much doubt it. I would expect it to grow output, however. I also expect the USA to grow manufacturing output over the next 10 years. If I had to pick the top 10 manufacturing countries for 2020: China, USA, Japan, Germany, India, Brazil, Korea, Indonesia, Mexico, France. We will see how things turn out.

I will be adding a post tomorrow, looking more closely at the most recent period for the top manufacturing countries. And I will be posting more frequently on manufacturing data, and also economic data in general, in 2012.

Related: Countries with the Most Manufacturing Production from 1980 to 2009 – Manufacturing Output as a Percent of GDP by Country 1980 to 2008 – Manufacturing Data, Accuracy Questions – Manufacturing Jobs Data: USA and China (1990-2005)

I found some interesting data from the USA census bureau on manufacturing employment in several countries (it would be interesting to see the data for more countries but for now I am limited to this data). Sadly they just use indexed data (I would rather see raw data). This data for example lets you see the changes in countries but I don’t see any way to compare the absolute values between countries – all you can compare is the changes between countries.

The data is all indexed at 2002 = 100. Interestingly the USA has increased output per hour much more than any other country since 2002. The USA index stands at 146, the next highest is Sweden at 127 then the UK at 120. Italy is the only country tracked that fell since 2002, to 94. Japan (the 3rd largest manufacturer and 2nd largest of the countries include, China isn’t included) only increased to 113. Germany (4th and 3rd) increased to 111.

The data also lets you look back from 1990 to 2002 and again the USA has increased productivity very well (2nd most) – the value in 1990 was 58. Sweden actually had the largest gain from 1990-2002, rising from 49. In 1990 Japan stood at 71 and Germany 70.

Compensation in the countries currency is remarkably consistent across all countries from 1990-2009. Japan shows the only significant divergence in the period of 2002 – 2009 actually decreasing pay in real terms (a small amount – from 100 to 98) while the average increases to about 110. So those with jobs are seeing increases in pay above inflation (except in Japan).

Total manufacturing employment is on a steady decline everywhere, which is consistent with all the other data we have seen over the years, everywhere. Norway has barely decreased (and Canada actually grew from 1990-2002) but overall there have been significant declines across the board. The UK lost the most employment the 2002 – 2009 drop (ending at 75.4); with the USA in 2nd – dropping to 58.4; and Canada coming in 3rd dropping to 81. Italy did fairly well on the employment front from 111 in 1990 to 95 in 2009. Aggregate hours also saw large declines across the board.

Related: Manufacturing Jobs Data: USA and China 1990 to 2004 – USA Manufacturing Output Continues to Increase (over the long term) – Manufacturing Output as a Percent of GDP by Country – Manufacturing Jobs

Made (once again) in America

The “decrease” in manufacturing in the USA has been exaggerated as I written for year (manufacturing has grown steadily over the last few decades in the USA). It is true though manufacturing in some plants has moved overseas. Over the last few years more and more stories report on American companies moving manufacturing back to the USA that they had moved offshore previously.

The Institute for Supply Management most recent survey reports a surge in US manufacturing to its highest reading in nearly seven years.

Related: Manufacturing Cars in the USA – Leading Manufacturing Countries Globally (1980-2009) – Global Manufacturing Employment Data – 1979 to 2007

Some manufacturing heads back to USA

The chart showing manufacturing output by country was created by the Curious Cat Economics Blog based on UN data (in 2009 USA dollars). You may use the chart with attribution.

The large decline in Germany was 23%. This was a 18% decline in Euro terms, and when you added the decline of the Euro the total USA dollar decline was 23%. Quite extraordinary. Most European countries were down over 15%. In fact, so extraordinary it makes me question the data. World economic data is useful and interesting but it isn’t perfect. USA manufacturing declined just .5%. China increased manufacturing production by 9%.

The last 2 years, China has stopped separating out mining and utilities from manufacturing. 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 and 2009 data – but that could be wrong). The unadjusted 2009 China total was $2.05 trillion and for the USA the total manufacturing, mining and utilities was $2.33 trillion. In 2009, the manufacturing total was 76% of USA manufacturing, mining and utilities. The percentage varies significantly between countries (the Russian federation is about 55% and Japan about 91%) and various over time as a countries economy changes.

The big, long term story remains the same. China has continued to grow manufacturing output tremendously. I see very little data to support the stories about manufacturing having to leave China to go elsewhere (especially when you look at the “lower wages” counties mentioned in news stories – they are not growing at any significant rate). The USA is still manufacturing a huge amount and that production has steadily grown over time.

When you look back over the period from 1980 to today you can see

1. The biggest story is the growth in Chinese manufacturing
2. The USA started out the largest and has grown significantly
3. Japan did very well from 1980 to 1995, and since they have struggled
4. The USA, China, Japan are really far ahead of other countries in total manufacturing output, and Germany is solidly in 4th place.
5. After that the countries are fairly closely grouped together. Though there are significant trends hidden by the scale of this graph, which I will explore in future posts. South Korea has growth significantly over this period, for example.
6. The biggest macro trend that the data shows, but is not so visible in this chart (other than China’s growth), is the very strong performance of emerging markets (and in fact some counties have fully become manufacturing powerhouses during this period, most notably China but also, South Korea and Brazil). And I see that continuing going forward (though that is speculation).

Two more interesting pieces of data. Italy is the 5th largest manufacturing country, I don’t think many people would guess that. Since 1980 Italy surpassed the UK and France but China rocketed passed them. And Indonesia has moved into 14th place, edging out Canada in 2009.

I plan to take more time in 2011 to look at global manufacturing and other global economic data more closely and to write about it here.

Related: Data on the Largest Manufacturing Countries in 2008 – Top 12 Manufacturing Countries in 2007 – Top 10 Manufacturing Countries 2006 – Leading global manufacturers in 2004