The Importance of U.S. Manufacturing

Introduction to the 9th Edition of Facts About Modern Manufacturing

The manufacturing sector in the United States has been in the spotlight more over the past couple of years than at any point in the past half-century. The reason: It has been one of the lone bright spots in a lengthy economic recovery. But the complete story of American manufacturing is about its importance to the American economy and the American worker and the challenges that American policymakers must address for the U.S. to remain the world's leading manufacturer.

No sector creates more economic value or supports more additional jobs than manufacturing. This is reflected in the multiplier effect and it underscores why a strong and healthy economy requires a vibrant and growing manufacturing sector. And, the manufacturing workforce is a direct beneficiary of a strong manufacturing sector, as employees enjoy a 19% compensation premium compared to individuals employed in other sectors.

Manufacturing is also vital to attracting investment from overseas. Manufacturing companies in the United States are responsible for nearly half of all U.S. exports while foreign-headquartered companies now invest nearly $750 billion in U.S. manufacturing and employ over 1.6 million people.

Policymakers are finally starting to understand the importance of manufacturing to economic growth and higher living standards. Leaders in both major political parties have publicly recognized the critical role manufacturing plays in creating jobs and vibrant communities. Now it is time for them to address the challenges that restrict greater growth and threaten U.S. manufacturers' ability to compete in the global market.

The most pressing challenge to U.S. manufacturers is the 20% structural cost burden they face compared to their global competitors. This burden raises the cost of every product that manufacturers produce and every job that companies create. It puts U.S. companies at a real disadvantage and discourages additional production, growth, and entrepreneurship in the U.S.

A second, growing concern is the quality of manufacturing education in the United States. The U.S. is falling behind our major competitors in math and science achievement, graduating significantly fewer engineers, and experiencing a major skills gap for production employees. This is at a time when manufacturing in the U.S. is becoming more complex, jobs require ever greater skills, and the current workforce is quickly approaching retirement age. Action is needed to ensure the next generation is prepared to succeed in the manufacturing workforce.

American manufacturers are the most resilient and dynamic in the world. Despite two severe recessions in less than a decade, manufacturing in the U.S. has bounced back and, due to its productivity, its innovation, and its sophistication, it remains the envy of the world. Now is the time to confront and solve the challenges American manufacturers face and position the United States to lead the world in manufacturing for years to come.

Jay Timmons
President and CEO
National Association of Manufacturers       
Stephen Gold
President and CEO
Jennifer McNelly
The Manufacturing Institute