There’s been concern in recent years regarding the United States manufacturing industry. It seems that each new report paints a bleak picture about the future of U.S. manufacturing, signaling lower production output and fewer jobs. However, gross output has actually more than doubled in the past three decades, attesting to a strong and healthy manufacturing industry that is here to stay.
Granted, many companies continue to conduct their normal business operations overseas, sending away hundreds of thousands of jobs and their respective tax revenue. Whether it’s a toy factory in China or an automobile manufacturing facility in Mexico, there are plenty of U.S.-based companies which are operating overseas to reduce expenses. While these companies may save some money upfront, however, they end up doing more damage to the U.S. economy in the long run. This has prompted many business owners to “reshore” their jobs back to the U.S. mainland.
According to data from the Bureau of Economic Analysis (BEA), gross output of U.S. manufacturing rose to $6.2 trillion in 2015, 36% of which accounts for gross domestic product. To put those numbers into perspective, that’s roughly twice the amount of output of any other major sector, including professional services, government and even real estate. Furthermore, $6.2 billion is more than double the amount of output experienced by the U.S. manufacturing industry 30 years ago.
So, what’s driving the U.S. manufacturing industry’s phenomenon growth and success? There are several different factors at play, one of which is the desire by manufacturing companies to close down their overseas facilities to bring jobs back to the U.S. This has spurred a revolution of sorts with companies touting their products as being “made in America.” And consumers have also jumped on board the bandwagon, choosing to purchase products and goods that are made here in the U.S. instead of overseas. Positive trends in the country’s economy are also helping to bolster the manufacturing industry. Because when consumers have more money, they purchase more products, creating a stronger demand for manufactured goods.
It’s important to note that certain areas of the U.S. manufacturing industry have fared better than others. Durable goods, for instance, saw the highest level of output. On the other hand, the production of nondurable goods dropped 7% from its peak. Nonetheless, market analysts say the U.S. manufacturing industry is strong and healthy — and there’s no end in sight for its growth.No tags for this post.