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ABOUT MEC: Top 20 Facts About Manufacturing

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Please consider the following Top 20 facts about Manufacturing.


·  In the most recent data, manufacturers contributed $2.17 trillion to the U.S. economy in 2015. This figure has risen since the second quarter of 2009, when manufacturers contributed $1.70 trillion. Over that same time frame, value-added output from durable goods manufacturing grew from $0.87 trillion to $1.18 trillion, with nondurable goods output up from $0.85 trillion to $0.99 trillion. In 2015, manufacturing accounted for 12.1 percent of GDP in the economy. (Source: Bureau of Economic Analysis) 

·  For every $1.00 spent in manufacturing, another $1.81 is added to the economy. That is the highest multiplier effect of any economic sector. In addition, for every one worker in manufacturing, there are another four employees hired elsewhere. (Source: NAM calculations using IMPLAN)

With that said, there is new research suggesting that manufacturing’s impacts on the economy are even larger than that if we take into consideration the entire manufacturing value chain plus manufacturing for other industries’ supply chains. That approach estimates that manufacturing could account for one-third of GDP and employment. Along those lines, it also estimated the total multiplier effect for manufacturing to be $3.60 for every $1.00 of value-added output, with one manufacturing employee generating another 3.4 workers elsewhere. (Source: Manufacturers Alliance for Productivity and Innovation)

·  The vast majority of manufacturing firms in the United States are quite small. In 2014, there were 251,901 firms in the manufacturing sector, with all but 3,749 firms considered to be small (i.e., having fewer than 500 employees). In fact, three-quarters of these firms have fewer than 20 employees. (Source: U.S. Census Bureau, Statistics of U.S. Businesses) 

·  Almost two-thirds of manufacturers are organized as pass-through entities. Looking just at manufacturing corporations and partnerships in the most recent data, 65.6 percent are either S corporations or partnerships. The remainder are C corporations. Note that this does not include sole proprietorships. If they were included, the percentage of pass-through entities rises to 83.4 percent. (Source: Internal Revenue Service, Statistics of Income)

·  There are 12.3 million manufacturing workers in the United States, accounting for 9 percent of the workforce. Since the end of the Great Recession, manufacturers have hired more than 800,000 workers. There are 7.7 million and 4.6 million workers in durable and nondurable goods manufacturing, respectively. (Source: Bureau of Labor Statistics)

·  In 2015, the average manufacturing worker in the United States earned $81,289 annually, including pay and benefits. The average worker in all nonfarm industries earned $63,830. Looking specifically at wages, the average manufacturing worker earned nearly $26.00 per hour, according to the latest figures, not including benefits. (Source: Bureau of Economic Analysis and Bureau of Labor Statistics)

·  Manufacturers have one of the highest percentages of workers who are eligible for health benefits provided by their employer. Indeed, 92 percent of manufacturing employees were eligible for health insurance benefits in 2015, according to the Kaiser Family Foundation. This is significantly higher than the 79 percent average for all firms. Of those who are eligible, 84 percent actually participate in their employer’s plans, i.e., the take-up rate. Three are only two other sectors – government (91 percent) and trade, communications and utilities (85 percent) that have higher take-up rates. (Source: Kaiser Family Foundation) 

·  Manufacturers have experienced tremendous growth over the past couple decades, making them more “lean” and helping them become more competitive globally. Output per hour for all workers in the manufacturing sector has increased by more than 2.5 times since 1987. In contrast, productivity is roughly 1.7 times greater for all nonfarm businesses. Note that durable goods manufacturers have seen even greater growth, almost tripling its labor productivity over that time frame.

To help illustrate the impact to the bottom line of this growth, unit labor costs in the manufacturing sector have fallen 8.4 percent since the end of the Great Recession, with even larger declines for durable goods firms. (Source: Bureau of Labor Statistics) 

·  Over the next decade, nearly 3½ million manufacturing jobs will likely be needed, and 2 million are expected to go unfilled due to the skills gap. Moreover, according to a recent report, 80 percent of manufacturers report a moderate or serious shortage of qualified applicants for skilled and highly-skilled production positions. (Source: Deloitte and the Manufacturing Institute) 

·  Exports support higher-paying jobs for an increasingly educated and diverse workforce. Jobs supported by exports pay, on average, 18 percent more than other jobs. Employees in the “most trade-intensive industries” earn an average compensation of nearly $94,000, or more than 56 percent more than those in manufacturing companies that were less engaged in trade. (Source: MAPI Foundation, using data from the Bureau of Economic Analysis) 

·  Over the past 25 years, U.S.-manufactured goods exports have quadrupled. In 1990, for example, U.S. manufacturers exported $329.5 billion in goods. By 2000, that number had more than doubled to $708.0 billion. In 2014, it reached an all-time high, for the fifth consecutive year, of $1.403 trillion, despite slowing global growth. With that said, a number of economic headwinds have dampened export demand since then, with U.S.-manufactured goods exports down 6.1 percent in 2015 to $1.317 trillion. (Source: U.S. Commerce Department) 

·  Manufactured goods exports have grown substantially to our largest trading partners since 1990, including to Canada, Mexico and even China. Moreover, free trade agreements are an important tool for opening new markets. The United States enjoyed a $12.7 billion manufacturing trade surplus with its trade agreement partners in 2015, compared with a $639.6 billion deficit with other countries. (Source: U.S. Commerce Department) 

·  Nearly half of all manufactured goods exports went to nations that the U.S. has free trade agreements (FTAs) with. In 2015, manufacturers in the U.S. exported $634.6 billion in goods to FTA countries, or 48.2 percent of the total. (Source: U.S. Commerce Department)

·  World trade in manufactured goods has more than doubled between 2000 and 2014—from $4.8 trillion to $12.2 trillion. World trade in manufactured goods greatly exceeds that of the U.S. market for those same goods. U.S. consumption of manufactured goods (domestic shipments and imports) equaled $4.1 trillion in 2014, equaling about 34 percent of global trade in manufactured goods. (Source: World Trade Organization) 

·  Taken alone, manufacturing in the United States would be the ninth-largest economy in the world. With $2.1 trillion in value added from manufacturing in 2014, only eight other nations (including the U.S.) would rank higher in terms of their gross domestic product. (Source: Bureau of Economic Analysis, International Monetary Fund)

·  Foreign direct investment in manufacturing exceeded $1.2 trillion for the first time ever in 2015. Across the past decade, foreign direct investment has more than doubled, up from $499.9 billion in 2005 to $1,222.9 billion in 2015. Moreover, that figure is likely to continue growing, especially when we consider the number of announced ventures that have yet to come online. (Source: Bureau of Economic Analysis)

·  U.S. affiliates of foreign multi-national enterprises employ more than 2 million manufacturing workers in the United States, or almost one-sixth of total employment in the sector. In 2012, the most recent year with data, manufacturing sectors with the largest employment from foreign multi-nationals included motor vehicles and parts (322,600), chemicals (319,700), machinery (222,200), food (216,200), primary and fabricated metal products (176,800), computer and electronic products (154,300) and plastics and rubber products (151,200). Given the increases in FDI seen since 2012 (see #15), these figures are likely to be higher now. (Source: Bureau of Economic Analysis) 

·  Manufacturers in the United States perform more than three-quarters of all private-sector research and development (R&D) in the nation, driving more innovation than any other sector. R&D in the manufacturing sector has risen from $126.2 billion in 2000 to $229.9 billion in 2014. In the most recent data, pharmaceuticals accounted for nearly one-third of all manufacturing R&D, spending $74.9 billion in 2014. Aerospace, chemicals, computers, electronics and motor vehicles and parts were also significant contributors to R&D spending in that year. (Source: Bureau of Economic Analysis)

·  Manufacturers consume more than 30 percent of the nation’s energy consumption. Industrial users consumed 31.5 quadrillion Btu of energy in 2014, or 32 percent of the total. (Source: U.S. Energy Information Administration, Annual Energy Outlook 2015)

·  The cost of federal regulations fall disproportionately on manufacturers, particularly those that are smaller. Manufacturers pay $19,564 per employee on average to comply with federal regulations, or nearly double the $9,991 per employee costs borne by all firms as a whole. In addition, small manufacturers with less than 50 employees spend 2.5 times the amount of large manufacturers. Environmental regulations account for 90 percent of the difference in compliance costs between manufacturers and the average firm. (Source: Crain and Crain (2014))


Manufacturing Facts provided by National Association of Manufacturers



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