Facts About Manufacturing

Manufacturing value-added output increased from $2.895 trillion at the annual rate in the fourth quarter to $2.905 trillion in the first quarter, an all-time high.Value-added output rose to a new record level in the first quarter for nondurable goods (up from $1.299 trillion to $1.312 trillion), but it slipped a bit from a record level for durable goods (down from $1.595 trillion to $1.593 trillion). Manufacturing accounted for 10.9% of value-added output in the U.S. economy in the first quarter. At the same time, real value-added output in the manufacturing sector decreased from $2.283 trillion at the annual rate in the fourth quarter to $2.252 trillion in the first quarter, as expressed in chained 2012 dollars. This figure remained lower than the record high in the fourth quarter of 2021, which was $2.325 trillion, suggesting that much of the gain in output since then has come from higher prices. (Source: Bureau of Economic Analysis)

Including indirect and induced impacts, for every $1.00 spent in manufacturing, there is a total impact of $2.60 to the overall U.S. economy. This figure represents one of the largest sectoral multipliers in the economy. In addition, for every one worker in manufacturing, 4.4 workers are added in the overall U.S. economy, including indirect and induced impacts, and for every $1.00 earned in direct labor income in the manufacturing sector, $3.75 in labor income earned is added to the overall U.S. economy. (Source: NAM calculations using 2021 IMPLAN data)

The majority of manufacturing firms in the United States are quite small.In 2020, there were 239,524 firms in the manufacturing sector, with all but 4,024 firms considered to be small (i.e., having fewer than 500 employees). In fact, 74.4% of these firms have fewer than 20 employees, and 93.1% have fewer than 100 employees. With that said, the bulk of employment comes from larger firms, with 58.4% of all employees in the sector working for firms with 500 or more employees. (Source: U.S. Census Bureau, Statistics of U.S. Businesses)

Manufacturing employment fell 35,000 in October. Strikes in the automotive industry accounted for the bulk of that decline, with employment in the motor vehicles and parts sector off by 33,200. Hiring has been quite sluggish this year among manufacturers, with the sector losing 14,000 workers year to date. There were downward revisions to the data in recent months. With that said, there were 12,960,000 workers in October, down from 12,995,000 workers in September, which was the best reading since November 2008.

At the same time, nonfarm payroll employment rose by 150,000 in October, down from a revised 297,000 in September. Despite some easing, the U.S. economy has added 2,388,000 workers through the first 10 months of 2023, a solid pace. Yet, the labor force participation rate edged down from 62.8% to 62.7%, and the number of employed workers decreased from a record 161,570,000 in September to 161,222,000 in October. The unemployment rate inched up from 3.8% in September to 3.9% in October, the highest since January 2021, with the number of unemployed Americans rising from 6,360,000 to 6,506,000. (Source: Bureau of Labor Statistics)

In 2022, manufacturing workers in the United States earned $98,846 on average, including pay and benefits. Workers in all private nonfarm industries earned $83,992 on average. Looking specifically at wages, the average hourly earnings of production and nonsupervisory workers in manufacturing rose 0.2% to $26.68 in October, with 5.1% growth over the past 12 months. This continues to point to a solid overall labor market, with wages rising strongly despite signs that manufacturing hiring has softened year to date. For all manufacturing employees, average hourly earnings were $32.79 in October, up 4.8% year-over-year. (Sources: Bureau of Economic Analysis and Bureau of Labor Statistics)

Manufacturers have one of the highest percentages of workers who are eligible for health benefits provided by their employer. Indeed, 93% of manufacturing employees were eligible for health insurance benefits in 2023, according to the Kaiser Family Foundation. This is significantly higher than the 79% average for all firms. Of those who are eligible, 79% participate in their employer’s plans (i.e., the take-up rate). State and local government (90%), transportation, communications and utilities (88%) and finance (81%) had higher take-up rates in 2023. Meanwhile, the average annual cost of a family health care plan for a family of four in manufacturing was $24,156 in 2023. (Source: Kaiser Family Foundation, Employer Health Benefits 2023 Annual Survey)

There were 627,000 manufacturing job openings in September, up from 604,000 in August. Overall, these data continue to reflect a labor market that remains solid despite cooling over the past year, with manufacturing job openings above pre-pandemic levels. Over the past six months, manufacturing job openings have averaged 605,000, down from 750,333 in the prior six months. In the larger economy, nonfarm business job openings rose to 9,553,000 in September. There were 6,360,000 unemployed Americans reported in September. Therefore, for every 1.5 job openings in the U.S. economy, there was just one unemployed worker. As such, there continued to be significantly more job openings than people actively looking for work, even as that ratio has narrowed notably year to date. Meanwhile, the number of manufacturing quits has fallen to 216,000 in September, the slowest since July 2020. This is a sign that churn, which has been a major issue for manufacturers amid a tight labor market, has eased significantly, approaching pre-pandemic levels. The average number of quits per month in the 2017–2019 period was 203,000 (Source: Bureau of Labor Statistics)

Over the next decade, 4 million manufacturing jobs will likely be needed, and 2.1 million are expected to go unfilled if we do not inspire more people to pursue modern manufacturing careers. Moreover, according to a recent report, the cost of those missing jobs could potentially total $1 trillion in 2030 alone. (Source: Deloitte and The Manufacturing Institute)

After weakening in 2019 and 2020 on trade policy and COVID-19 challenges, trade volumes rebounded in 2021 and 2022, with U.S.-manufactured goods exports hitting a new record level. In 2022, manufacturers in the United States exported $1,596.79 billion, with durable and nondurable goods exports also hitting all-times highs, at $970.97 billion and $625.82 billion, respectively. (Source: U.S. Commerce Department)

Manufactured goods exports have more than doubled over the past two decades. U.S.-manufactured goods exports totaled $622.31 billion in 2002, and in 2021, that figure is $1,399.17 billion, or 2.25 times larger. Nondurable goods exports have grown even faster over that time frame, up from $171.26 billion in 2002 to $521.10 in 2021, or 3.04 times larger. Meanwhile, durable goods exports have nearly doubled from $451.05 billion in 2002 to $878.07 billion to 2021. (Source: U.S. Commerce Department)

World trade in manufactured goods continued to expand rapidly, rising from $14.87 trillion in 2021 to $15.29 trillion in 2022.That figure has risen from $4.67 trillion in 2000 and $12.14 trillion in 2010. The U.S. share of world trade in manufactured goods was 7.8% in 2022. (Source: World Trade Organization)

Taken alone, manufacturing in the United States would be the eighth-largest economy in the world.With $2.50 trillion in value added from manufacturing in 2021, only seven other nations (including the U.S.) would rank higher in terms of their GDP. Those other nations with higher GDP in 2020 were (in order) the U.S., China, Japan, Germany, India, the United Kingdom and France. After manufacturing in the U.S., the next five economies would be Italy, Canada, South Korea, Russia and Australia, in that order. (Source: Bureau of Economic Analysis, International Monetary Fund)

Foreign direct investment in U.S. manufacturing reached a new record level in 2022.Overall, foreign direct investment has jumped from $756.87 billion in 2010 to $2,299.18 billion in 2021, a new record. The manufacturing sector comprised 42.4% of total foreign direct investment in 2022, as expressed on a historical cost basis. These data should continue to grow over the coming years, with the sector increasingly more competitive globally and with more companies reevaluating their supply chain and renewing their investments in the United States. (Source: Bureau of Economic Analysis)

Private manufacturing construction declined 0.4% from $199.25 billion at the annual rate in August to $198.45 billion in September. This remained not far from the record high in May, which was $199.73 billion. Manufacturing construction has soared dramatically, up 62.5% year-over-year, as the sector continues to make significant increases in the capacity in the United States. This should bode well for future growth in manufacturing in the U.S. moving forward. At the same time, private manufacturing construction activity has stalled somewhat more recently, albeit at an extremely elevated pace, averaging $196.83 billion over the past six months. (Source: U.S. Census Bureau)

U.S. affiliates of foreign multinational enterprises employed more than 2.8 million manufacturing workers in the United States in 2021, or roughly 22.8% of total employment in the sector. In 2021, the most recent year with data, manufacturing sectors with the largest employment from foreign multinationals included motor vehicles and parts (512,700), chemicals (425,900, including 232,300 in pharmaceuticals and medicines), food (334,400), machinery (252,700), other manufacturing (226,200) and computers and electronic products (211,100). Total compensation in the manufacturing sectors from these affiliates was $274.1 billion, and those entities spent nearly $56.0 billion in research and development. (Source: Bureau of Economic Analysis, Activities of U.S. Affiliates of Foreign Multinational Enterprises, 2021)

Manufacturers in the United States perform 53.0% of all private-sector R&D in the nation, driving more innovation than any other sector. R&D in the manufacturing sector has risen from $132.5 billion in 2000 to a record $361.2 billion in 2022. In the most recent data, pharmaceuticals accounted for one-third of all manufacturing R&D, spending $120.3 billion in 2022. Semiconductor and other electronic components (15.9%), other computer and electronic manufacturing (14.6%) and motor vehicles and parts (8.9%) also contributed significantly to R&D spending in 2022, with each hitting new all-time high levels of R&D for the year. (Source: Bureau of Economic Analysis)

Industrial users consumed 33.25 quadrillion Btu of energy in 2022, or 33.5% of the total. Moreover, the U.S. Energy Information Administration estimates that industrial users will consume 34.21 quadrillion Btu of energy in 2030, or 2.9% more than in 2022. (Source: U.S. Energy Information Administration, Annual Energy Outlook 2023)

The cost of federal regulations falls disproportionately on manufacturers, particularly those that are smaller. Manufacturers pay $29,100 per employee on average to comply with federal regulations, or nearly double the $12,800 per employee costs borne by all firms as a whole. The burden is even greater for small manufacturers in the U.S., or those with fewer than 50 employees, which incur the highest regulatory costs of all U.S. firms: an estimated $50,100 per employee per year. Overall, the total cost of complying with federal regulations in 2022 was $3.079 trillion (in 2023 dollars). (Source: The Cost of Federal Regulation to the U.S. Economy, Manufacturing and Small Business, October 2023).