In spite of the negative rhetoric about goods no longer being made in America, the surprising reality is that American manufacturing is actually quite strong and continuing to grow. It’s true that not as many workers are employed in the manufacturing sector as once were, but this is only part of the story.  An example of a growth company in the US that is setting records is JEM Electronics.

Chinese Manufacturing

Everyone knows China is the leading manufacturer in the world. But what a lot of people don’t realize is their manufacturing peaked in the 1990s and has been declining ever since. Thirty years ago, human capital was the primary input for manufacturing, and Chinese labor was as cheap as it came. But these days, manufacturing has changed, and there is a new challenger for the position of top producer in the world: the United States. In fact, experts predict the US will overtake China as the #1 manufacturer in 2020.

American Manufacturing

In 1900, there were a lot more people employed in agricultural jobs than there are now. Is America starving now? Of course not! As technology and markets changed, fewer and fewer laborers were required for the same agricultural output. Those laborers eventually transitioned into other jobs such as tractor mechanic and truck drivers. Likewise, there are undoubtedly fewer Americans employed in American manufacturing jobs than there were thirty years ago, yet manufacturing output in the past three decades has actually doubled! Manufacturing is America’s largest economic sector, and the US currently manufactures more than the next three global producers combined.

In 2015, gross output of American manufacturing industries totaled $6.2 trillion – about 36% of GDP. Refined petroleum is America’s primary manufacturing output, but some of the other significant areas of manufacturing include:

  • Commercial passenger planes
  • Light trucks and other automobiles
  • Pharmaceuticals
  • Iron and steel
  • Plastics
  • Medical equipment

Many of the products American manufacturing specializes in are high-value goods. While automation has reduced the number of workers in manufacturing, there are some goods best manufactured by skilled workers like those found in the US. In fact, according to the Congressional Research Service, skilled manufacturing jobs for workers with a graduate degree have multiplied by 32% since 2000.

Manufacturing Growth

The reality of American manufacturing is that there are much fewer low-skill manufacturing jobs available in the US. But manufacturing output, the value of goods produced, and demand for skilled manufacturing workers are all on the rise. The value added by American manufacturing is more than $2 trillion annually, a near record for the US. The output of durable goods in 2015 was triple what it was in 1980 which was double what it was in 1960. This increased productivity and focus on sophisticated products means American manufacturing is doing alright. It’s evolving, but it currently exceeds the manufacturing of nearly every other country in the world – and it’s still growing.

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