Why Does Manufacturing Matter?
Manufacturers contributed $2.17 trillion to the US economy in 2015. This figure has risen since the second quarter of 2009, when manufacturers contributed $1.70 trillion. In 2015, manufacturing accounted for 12.1 percent of gross domestic product in the economy. (Bureau of Economic Analysis)
For every $1 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. (NAM calculations using IMPLAN.)
The vast majority of manufacturing firms in the United States are quite small. There were 251,857 firms in the manufacturing sector in 2013, with all but 3,702 firms considered to be small with <500 employees. In fact, three-quarters of these firms have less than 20 employees. (US Census Bureau, Statistics of US Businesses)
There are currently 12.3 million manufacturing workers in the United States, accounting for 9 percent of the workforce. There are currently 7.7 million and 4.6 million workers in durable and nondurable goods manufacturers, respectively. (Bureau of Labor Statistics)
In 2014, the average manufacturing worker in the United States earned $79,553 annually, including pay and benefits. The average worker in all industries earned $64,204. Looking specifically at wages, the average manufacturing worker earned nearly $26 per hour, not including benefits. (Bureau of Economic Analysis, 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. 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. Three are only two other sectors – government (91%) and trade, communications and utilities (85%) that have higher take-up rates. (Kaiser Family Foundation)
Over the next decade, nearly 3.5 million manufacturing jobs will likely be needed, and 2 million are expected to go unfilled due to the skills gap. Moreover, 80 percent of manufacturers report a moderate or serious shortage of qualified applicants for skilled and highly-skilled production positions. (Deloitte and the Manufacturing Institute)
US 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, these figures are likely to be higher now. (Bureau of Economic Analysis)
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. (MAPI Foundation, using data from the Bureau of Economic Analysis)
Over the past 25 years, US-manufactured goods exports have quadrupled. In 1990, US manufacturers exported $329.5 billion in goods. By 2000, that number had more than doubled to $708 billion. In 2014, it reached an all-time high, for the fifth consecutive year, of $1.4 trillion, despite slowing global growth. US-manufactured goods exports were down 6.1 percent in 2015 to $1.317 trillion. (US 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. (US Commerce Department)
Nearly half of all manufactured goods exports went to nations that the US has free trade agreements (FTAs) with. In 2015, manufacturers in the US exported $634.6 billion in goods to FTA countries, or 48.2 percent of the total. Manufacturers in the United States sold $12.7 billion more in manufactured goods to our FTAs than we bought from them. (US Commerce Department; NAM)
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 US market for those same goods. US consumption of manufactured goods (domestic shipments and imports) equaled $4.1 trillion in 2014, equaling about 34 percent of global trade in manufactured goods. (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 US) would rank higher in terms of their gross domestic product. (Bureau of Economic Analysis, International Monetary Fund)
Foreign direct investment in manufacturing exceeded $1 trillion for the first time ever in 2014. Over the course of the past decade, FDI has more than doubled, up from $499.9 billion in 2005 to $1,045.5 billion in 2014. Moreover, that figure is likely to continue growing more forward, especially when we consider the number of announced ventures that have yet to come online. (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. 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. (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. (US 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. (Crain and Crain, 2014)
Manufacturing is a major driver of Missouri's economy, contributing over $36.28 billion towards the gross state product. (Bureau of Economic Analysis 2014)
Missouri was home to 5,465 manufacturing firms in 2013. (Bureau of Economic Analysis)
The top Missouri manufacturing sectors in 2013 were Food, Beverage & Tobacco and Chemical Products, followed by Fabricated Metal Products, Motor Vehicles & Parts and Aerospace.
Manufacturing employs over 260,700 workers across the state, accounting for more than 9.4 percent of nonfarm employment. In 2014, the average Missouri manufacturing worker earned $67,407 annually. The average annual compensation for workers in all other nonfarm businesses was $45,447.