Is the US Losing Its Manufacturing Base?

Federal Reserve Chicago ^ | 2003? | William Strauss-Chicago Fed Economist

[shrinkermd]

This is a series of slides done by the Chicago Federal Reserve. You can go through them quickly and see some interesting information.

A summary of these slides is as follows:

• Manufacturing in the US has never been higher.

• Success in manufacturing is due to massive increases in productivity.

• Productivity has changed the nature of the workforce.

• The profit margin for manufacturing exceeds that of other industries.

• Future projections include increasing manufacturing output with fewer and fewer employees needed.

[shrinkermd]

I post this since both Hillary and Obama are insisting manufacuring is in the tank. Not so. They are attempting to solve economic problems with faulty proposals to restrict imports, stop NAFTA and so forth.

Also, note one of the tables documents quite clearly that manufacturing as a percentage of the GDP is now about 12%? Or so I read one of the graphs.

[e-male]

Why can’t i find products made in the USA?

[DoughtyOne]

I’ve seen this type of thing before. We sent all those jobs to China and elsewhere, but it didn’t impact our manufacturing base at all. Thanks for the post.

[pnh102]

I take anything the Federal Reserve says with a grain of salt. After all, they are still telling us there is no inflation as well.

[cripplecreek]

Its magic I tell ya.

[Sender]

I don't have any hard numbers, but lots of firmly American-made products that were symbols of our national pride are now made in China.

We don't make textiles anymore, we import steel and auto components, even Schwinn bicycles and Buck knives are Chinese.

Not only call centers and assembly, but our intellectual capital has been outsourced. Our money has been oursourced.

I'm not participating in this everything-is-OK party. If American manufacturing and productivity is so high, why can't I find American-made products?

You can still get an American-made Oreck vacuum cleaner, while the offer lasts. You can still get Hershey bars. After that, it gets tougher.

[padre35]

NE Ohio has seen enough plants close to make NAFTA a political millstone, NAFTA is now a liability to those politicians who were involved with it’s passage.

Che’ is hammering Hilde over Bubba’s passage of NAFTA.

BTW, “productivity gains” are not raising wages for those in that segment of the economy, in fact, buying power has declined, and “Joe Average” knows it intuitively, that makes “free trade” a political loser of a issue, the consensus for passage of more deals has been broken.

[pissant]

What are we making more of than we were 10 years ago? 20? 30?

Are we making more cars? Maybe, with the addition of foreign assembly plants.

More car parts? Nope

More power tools? Nope

More appliances? Nope

More computers? Nope

More cirucit boards? Nope

Machined airplane parts? Nope

Machine tools? Nope

Clothes? Nope

Shoes? Nope

Furniture? Nope

Toys? Nope

Lamps? Nope

Telephone equipment? Nope

Hand tools? Nope

More TVs and stereos? Nope

More ships? Nope

More steel products? Nope

I’m sure there are some products like chemical based products, Heavy Machines (like dozers), industrial electric gear, and food processing equipment where we still excel. But the list is getting shorter.

[Robert A Cook PE]

Losing its manufacturing base?

H*ll, it has lost it already => Can’t even make the pressure vessels any more for nuclear power plants, the pipes for steam plants, the big diesels engines for ships, the ships themselves, the turbines, the generators, the wire, the computers, the steel, the chemicals, ....

Nor even the machines to build the machines to MAKE the machines to build the plants .....

[AFPhys]

Great post. Really puts a lie to those who claim the US is being destroyed by “outsourcing” ... we’ve pretty much simply switched from manufacturing low tech stuff to concentrating on adding value in high tech ways.

[ari-freedom]

We are making more money!

[Tallguy]

I take anything the Federal Reserve says with a grain of salt.

I just received an economic survey at my company from the census bureau. Now my company -- a manufacturer's rep firm -- makes nothing. We sell on behalf of other manufacturer's. They had us down as being a member of a particular manufacturing sector and that was COMPLETELY wrong, so I picked up the phone & called the service number. I was told to "fill-in" the first 7 sections related to sales figures & put "DNA" on the last 30-odd sections.

Before hanging-up I asked "How are these stats to be used?" "I mean if you are also surveying the manufacturers that I represent, then you are double-counting the sales in my region."

Silence....

So you're right. Government stats are basically garbage.

[T-Bird45]

Why can’t i find products made in the USA?

Mostly because the products being made in the USA are being manufactured for industrial use, not consumer use. The manufacturing that has shifted overseas is mostly for high volume, lower margin consumer-purchased items that are typically referred to by economists as non-durable goods. At some level, this has also affected durable goods manufacturing but these goods are more sensitive to exchange rates, transportation costs, and operating efficiencies. Depending on the circumstances of the actual product and market served, some of this manufacturing has returned to US production.

When I speak of industrial goods, I refer to companies that are manufacturing for energy/process industries, aerospace (especially in national defense), automotive to some degree, etc.

[DoughtyOne]

I don’t know about you folks, but something smells rather rotten here. Either the classification of what manufacturing truly is has been changed, or these numbers are collected in a manner different that what they used to be.

Let’s not forget that our populace has grown considerably also. That alone would bump numbers up over time, even if a lot of jobs had left.

Figures lie and liars figure.

[bannie]

Go to Goodwill and the Salvation Army.

[utherdoul]

We can still manufactor them. Its just cheaper to do it elsewhere. I don’t understand why people seem to think if we outsource an industry we automatically lose any capability to make it ourselves. If we suddenly couldn’t import manufactored goods, it would be rough but its not like we couldn’t build or convert our own factories. Making shoes and toy planes isn’t rocket science.

[cripplecreek]

All I know is that I live in an area that was once an industrial powerhouse. Now it’s retail or welfare.

You rememer the Clinton job numbers? Lots of folks lost good paying jobs and ended up going to temp services to do two and three jobs making a lot less than they made on one.

[Dat]

Of course you don’t have any numbers. You guys just go on feelings and anecdotal evidence.

[GingisK]

Really puts a lie to those who claim the US is being destroyed by “outsourcing” ...

I just saw what it claimed. There was no proof.

See post #8. Tell us what we are missing.

[KayEyeDoubleDee]

I’m sure there are some products like chemical based products, Heavy Machines (like dozers), industrial electric gear, and food processing equipment where we still excel.

Would you rather excel at a late-20th/early-21st century techology, like pharmaceuticals, computer chips, computer software, and aviation/avionics, or would you prefer to excel at a late-19th/early-20th century technology, like automobiles?