U.S. Manufacturing Tenth-Largest World Economy

By: Janet Harrah, Center for Economic Analysis and Development at Northern Kentucky University, Cincinnati.com

While stories abound about the demise of U.S. manufacturing, the truth is that manufacturing is still vital to the health of the economy. As noted in the 2012 edition of Facts about Modern Manufacturing, “the U.S. manufacturing sector is so huge that if it were its own country, it would rank as the tenth-largest world economy.” Locally, the impact of manufacturing has been well evident in its impact on our economic recovery.

Employment in the Cincinnati metro area has grown faster than average over the past year primarily based on the strength of our manufacturing sector. The recessionary decline in Cincinnati’s manufacturing jobs was not as steep as that of the United States. Additionally, Cincinnati’s manufacturing sector has been rebounding much more quickly than the U.S. overall.

The Facts about Modern Manufacturing, produced jointly by The Manufacturing Institute, the Manufacturers Alliance for Productivity and Innovation, and the National Association of Manufacturers, provides key facts and figures that define the state of the U.S. manufacturing industry.

Some key findings from the recently released report include:
•Manufacturing is driving productivity growth in the U.S. economy, increasing at two and half times the rate of the service sector.
•Companies with fewer than 100 employees make up more than 94 percent of all U.S. manufacturers.
•U.S. manufacturers invest a far greater percentage of revenue in research and development than other industries.
•Manufacturing employees earn a higher average salary and receive greater benefits than workers in other industries.
•U.S. manufacturers have reduced energy usage and emissions to below the level from 1990.
•U.S. manufacturers are responsible for 47 percent of total U.S. exports.
•The U.S. is the number-one destination for foreign direct investment (FDI) by a wide margin.

The report highlights a challenge for our region as well. Between 2006 and 2011, the 27 states that saw manufacturing’s contribution to economic growth decline most significantly were clustered in the eastern half of the country including Kentucky and Ohio.

Read the full report here.

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