Strength in manufacturing
Date posted: May 14, 2013
Many people still gauge the strength of our economy by the strength of manufacturing. Specifically, they look at the number of folks working in factories to judge the importance of manufacturing in our economy. The conclusion reached is that manufacturing is waning. Is this an accurate view? N.C. State University economist Mike Walden responds.
Well, there are many, many statistics and ways that you can measure an economy or measure a piece of the economy like manufacturing. And if we look at manufacturing — really over the last 20 or 30 years in our country, employment is the only statistic — just about the only statistic — that is not showing how strong manufacturing is in our country.
If you look, for example, at productivity — that is the efficiency in manufacturing — how much output you get per input. If you look purely at the increases in production, output. If you look at the use of modern equipment and technology, if you look at the rate of return on investments that investors have had in manufacturing. U.S. manufacturing really shines.
All of those numbers are high, going up and really the best for all sectors of our economy. If you even look, for example, at how well U.S. manufacturing has done in terms of selling products to China, we see that our product sales to China — U.S. manufacturing product sales to China — have gone up five times, five fold in the last decade.
I think the bottom line here is that the manufacturing we have today is not the manufacturing that our father had or our grandfather had. It is a different kind of manufacturing that does not rely as much on people and workers as on machinery and technology, but it’s still a very competitive and prosperous manufacturing.
Category: Economic Perspective