Friday, May 2, 2008

Manufacturing Share

In today's column, David Brooks argues that that the US manufacturing sector is actually doing very well. Brooks writes:

Nor is the globalization paradigm even accurate when applied to manufacturing. Instead of fleeing to Asia, U.S. manufacturing output is up over recent decades. As Thomas Duesterberg of Manufacturers Alliance/MAPI, a research firm, has pointed out, the U.S.’s share of global manufacturing output has actually increased slightly since 1980.

The graph below is based on current UN statistics. As the graph shows, Brooks claim is technically accurate, though also not a little misleading. Yes, the US share of global manufacturing is up slightly from 1980, but 1980 is THE LOWEST US SHARE in the entire dataset. Another way to interpret this, and much more accurate, would be to state that the US share of global manufacturing is near its all time low for the period from 1970 to 2006.



Howard Richman said...

I suspect that this comparison is flawed also because it is looking at output, not value-added. The value-added of US manufacturing may be going down, even if the output is going up. It is clear that the proportion of foreign made parts in US manufactured items is increasing.


Howard Richman said...

Another factor to consider is how much of this is defense manufacturing for the US government.

Jesse Richman said...

In 2009, the value added by U.S. manufacturing was 18.4 percent of global output according to UN statistics.