Well, yes they do. Especially so for the United States. Our manufacturing capacity has increased over virtually all time frames for at least as long as data has been collected. As I've written previously, "U.S. manufacturing output has actually increased dramatically, more than eleven-fold from 1940 to 2000." As you can see from the chart on the right (HT: Cafe Hayek), after a brief dip starting in 2000, manufacturing output continues up, up, up and may even be accelerating with the weakening dollar. Manufacturing output has even nearly kept pace with the growth of the rest of the economy.We still manufacture more than any other country in the world, even China, which has more than four times as many people. We manufacture very advanced products (think Boeing's aircraft) while countries like China manufacture the plastic toys for McDonalds' happy meals.
Manufacturing is alive and growing in the United States and will continue to be an important sector of our economy for a long time to come.
6 comments:
Very true indeed, thanks for the post.
I do think it's fair to point out, though, that if you looked at manufacturing as a percentage of national output over the past fifty years you'd see a different sort of graph.
Will,
Manufacturing has actually been pretty stable over the last fifty years as a percentage of GDP. According to http://www.cato.org/research/articles/reynolds-030831.html:
"manufacturing's share of the U.S. economy, as measured by real GDP, has been stable since the late 1940s.... It is impressive for any private activity to maintain a stable share of GDP, since government spending has risen from about 20 percent of GDP in the early 1950s to 30 percent since the 1980s."
As a fraction of the private sector, it's very close to the same size it was 50 years ago.
It is also important to fully understand how jobs become counted as "manufacturing."
AFAIK, if an accountant works for a manufacturing company, say, Ford, then that is a manufacturing job.
Should Ford outsource that service, that accountants new job will be a "service" job.
Tends to skew the stats a bit.
Ah, thanks for the link to the CATO link, Brett. Very interesting.
Skipper, even if that is true, still, my question would be why should our definition of "manufacturing" include only someone on an assembly line? If it's the health of an industry we're looking at, I see little reason to adapt such a restrictive bright line.
Will:
still, my question would be why should our definition of "manufacturing" include only someone on an assembly line? If it's the health of an industry we're looking at, I see little reason to adapt such a restrictive bright line.
Good point. I don't see why, either.
Spinning lug nuts on an assembly line counts as a manufacturing job.
Building Big Macs does not.
Why? I sure dunno.
The CPI, which is hardly, if at all, adjusted for hedonic inflation, (never mind its considering things like changes in raw material prices as "inflation"), hopelessly exaggerates inflation.
Similarly, manufacturing statistics, because they, in effect, play a shell game with employment numbers, distort the actual picture nearly beyond recognition.
I gave up caring very much 30-some years ago when doing an interview with the dean of the Harvard Graduate School of Business.
He had written a book predicting that the economy was or soon would be over half 'service.' So I read the book.
Among the service industries were railroads, previously counted by every economic historian I'd ever heard of as heavy industry.
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