We heard a great deal about manufacturing during the recent election season. But what is really happening in this vital sector of the U.S. economy? Is it declining massively with jobs moving overseas? Or is something else happening? As is usually the case, once you get past the political rhetoric and the media sound bites, the answer is actually much more complicated.
What is Manufacturing?
It’s always good to start any discussion with the sure footing that can only come from a simple definition. In this case, manufacturing is transforming raw materials into new products. Manufacturing businesses include plants and factories—as well as small businesses—that make things by hand, such as bakeries and tailors.
Where Does Manufacturing Rank in the U.S. Economy?
Here are the top 14 industries of 2016 ranked by their real gross output in billions as reported by the U.S. Bureau of Economic Analysis:
- Manufacturing, 5,380.5 billion
- Finance, $5,024.3 billion
- Professional Services, $3,354.4 billion
- Government, $3,160.1 billion
- Educational Services and Healthcare, $2,405.5 billion
- Information, $1,595 billion
- Retail Trade, 1,544.9 billion
- Wholesale Trade, 1,382.7 billion
- Construction, $1,232.2 billion
- Arts and Entertainment, $1,180.9 billion
- Transportation and Warehousing, $941 billion
- Mining, $430.5 billion
- Utilities, $388.3 billion
- Agriculture, $376 billion
As you can see, manufacturing remains at the top of all the industries within the U.S. economy. Plus, the National Association of Manufacturers notes that for every dollar spent in manufacturing, another $1.81 is added to the overall economy, the highest multiplier of any sector. So its impact on the overall economy is much bigger even than its top ranking on this list.
What Are the Top Manufactured Products?
According to the U.S. Census Bureau’s Annual Survey of Manufactures, based on 2015 data, here are the top manufactured products by the value of products shipped:
- Petroleum refining including gasoline, $662 billion
- Light trucks and utility vehicle manufacturing, $181 billion
- Pharmaceutical preparation, $153 billion
- Aircraft manufacturing, $123 billion
- Automobile manufacturing, $118 billion
- Animal slaughtering, $97 billion
- Plastic product manufacturing, $89 billion
- Iron and steel mills, $84 billion
You can see that petroleum refining is by far the top manufactured product listed.
Is Manufacturing Growing or Declining?
Manufacturing has grown over the past three decades. The Bureau of Labor Statistics found that real output as of the first quarter 2017 is indexed at 129.26 versus 69.79 in 1987, as cited in a Pew Research Center Report. This is seasonally adjusted to an index of 100 established at the 2009 number. That all adds up to a whopping 85% growth rate.
Of course, there are a number of factors at play in these numbers. The productivity index for manufacturing has increased 2.5 times since 1987. So manufacturers are doing much more with far less, and that includes fewer workers.
What’s Happening with Employment in Manufacturing?
Employment in manufacturing has declined sharply over that same time frame. In 1987 there were 17.5 million people employed in manufacturing. By June 2017, that number came in at 12.4 million. That is a decline of 29% over 20 years. Note, too, that the peak of U.S. employment happened in 1979 at 19.4 million.
What About Average Wages in Manufacturing?
Wages for manufacturing workers remain higher than many other sectors, particularly if you factor in education levels. The average manufacturing annual wage in 2015 including benefits was $81,289. The average wage premium, the amount manufacturing wages exceed non-manufacturing wages, for non-college educated workers was 10.9% in 2012–13. Yet in some states that premium was much higher, such as 24.4% in Montana and 21.9% in Michigan.
Is There a Manufacturing Labor Shortage?
Even with wage premiums, many jobs in manufacturing are still open. It’s estimated that 3.4 million employees will be needed in manufacturing over the next decade, yet 2 million jobs will go unfilled due to shortages of skilled workers coupled with baby boomer retirements. That calls for savvy manufacturers to find ways to recruit talented people and provide the necessary training for their growth and advancement with their organization.
What’s It Add Up To?
That’s our take on some key manufacturing statistics, out of the thousands if not millions of possible numbers. Overall, it tells us that manufacturing is growing and that employment will start to look up for those with the right mix of skills, and they’ll earn a premium wage.
We’ll be there, too. As we’ve been doing for the past 40 years, through all the ups and downs, we will continue to provide the very best in personal protective equipment. Whether it’s gloves, glasses, garments, or all three, you can find them at MCR Safety.
For more information about our products browse our website, request a catalog, find a distributor, or give us a call at 800-955-6887.