Howard recently had a post listing the top 5 economic myths in the United States today. I want to focus on number 4: "America is de-industrializing, and manufacturing is dying." This myth is far, far more pervasive than the rest of them. Even those who are very positive on the economy often believe it and discount it by saying something like, "yeah, but advanced economies don't manufacture."
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.