Fly like an eagle

May 1, 2007
Late last year, the National Association of Manufacturers (NAM) released a report on the state of U.S. manufacturing that would surprise many people.

Late last year, the National Association of Manufacturers (NAM) released a report on the state of U.S. manufacturing that would surprise many people. In contrast to the bleak picture so often portrayed on TV and in newspapers, The Facts About Modern Manufacturing reveals a globally dominant industry that's contributing significantly to America's success.

“Manufacturing output in America is at an all-time high, playing a central role in our economy,” says John Engler, president of NAM. “If it existed on its own, U.S. manufacturing would be the eighth largest economy in the world.”

“All too often, the perception is that American manufacturing's heyday is in the past, but nothing could be further from the truth,” adds Jerry Jasinowski, president of the Manufacturing Institute, NAM's research and education arm. “The facts show that manufacturing drives economic growth, productivity, and innovation in the U.S., and will continue to do so for years to come.”

One way that the report establishes the importance, and strength, of U.S. manufacturing is by comparing it with other market sectors in terms of influence on Gross Domestic Product. Between 2001 and 2005, manufacturing accounted for 15 percent of U.S. economic growth — real GDP adjusted for inflation — ranking highest among all sectors. In 2005 alone, manufacturing contributed $1.5 trillion to the GDP and continues to grow faster than the overall economy.

What's fueling this amazing trend, the report suggests, is productivity. Over the past decade, manufacturing productivity more than doubled. Since 1987, it's up 94 percent, far outpacing the 38 percent increase in the rest of the business sector.

Today, more goods are made in America than at any other time in U.S. history. The casual observer may equate this to widgets per minute, but in the big picture, productivity is measured in wages and benefit compensation. In the words of Federal Reserve Chairman Ben Bernanke, productivity growth is “perhaps the single most important determinant of average living standards.” And the readers of Motion System Design can take credit for their role in helping the cause.

Another impressive fact highlighted in the report is that manufactured goods account for more than 60 percent of the products America exports, helping offset the cost of what we buy from abroad. What agricultural exporters bring in each year — about $50 billion — manufacturers take in each month. This is especially weighty in light of the claim by former Federal Reserve Chairman Alan Greenspan that the three sources of original wealth are agriculture, manufacturing, and mining.

Besides its role in producing new wealth, manufacturing activity has a huge multiplier effect on our economy. Each manufacturing dollar generates an additional $1.37 in economic activity. Manufacturing also provides nearly half of all corporate taxes collected by state and local governments, while funding more than 70 percent of the R&D conducted annually in the private sector.

“Some mistakenly believe manufacturing in the U.S. is in decline,” says Dennis Cuneo, senior vice president of Toyota Motor North America, one of the sponsors of the report. “On the contrary, U.S. manufacturing is vibrant and robust. In fact, we believe the U.S. will remain the biggest and most successful manufacturer in the world, and we intend to help it do so by continuing to expand our investment in American manufacturing.”

To get a copy of The Facts About Modern Manufacturing, log on to

I'd like to hear your views as well. What's your take on the state of U.S. manufacturing, and why do you think it's so often portrayed in a poor light?

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