Growth in Production of Computers and Electrical Components Obscures Overall Decline in U.S. Manufacturing

Monday, February 02, 2015
(photo: Zentech)

Many point to an increase in U.S. manufacturing as part of the reason for the recovery from the Great Recession. But if manufacturing is what’s boosting the recovery, the economy is hanging by the thin thread of computers and electronic components.

 

That segment of the economy was responsible for 110% of all manufacturing growth between 2000 and 2009, according to a study (pdf) from the Information Technology & Innovation Foundation. That means that the rest of the manufacturing sector was actually performing worse in 2009 than it had been at the start of the decade. Not surprisingly, authors Adams B. Nager and Robert D. Atkinson titled their report: “The Myth of America’s Manufacturing Renaissance: The Real State of U.S. Manufacturing.”

 

Manufacturing as a whole increased 7.7% during that period. But if the computer and electronic components sector is removed, manufacturing actually dropped 0.9%.

 

Nor has manufacturing employment completely rebounded. About 2 million manufacturing jobs were lost during the recession, and about 720,000, or about 12% of the employment lost during that period, had returned by the end of 2013. However, that improvement was only barely ahead of the growth of the U.S. workforce.

 

The report went on to say that much of the recovery in manufacturing jobs has been cyclical, rather than structural. That is, now that people have more money, they’re spending more on durable goods, some of which are manufactured in the U.S.. “The cyclical nature of durable goods is observable in the auto industry, a key driver of recent manufacturing job growth....From 2007 to 2009, auto sales fell precipitously by 65 percent, only to climb back in the next three years, growing by 279 percent from 2009 to 2012. But this resurgence in passenger vehicle sales does not reflect a rebound in the global competitiveness of the U.S. automobile sector. Other durable goods industries such as aviation and machinery reflect similar trends,” according to the report.

-Steve Straehley

 

To Learn More:

The Myth of America’s Manufacturing Renaissance: The Real State of U.S. Manufacturing (by Adams B. Nager and Robert D. Atkinson, Information Technology & Innovation Foundation) (pdf)

Income Inequality and Outsourcing of Manufacturing Leads to Growing Poverty for White Americans (by Noel Brinkerhoff, AllGov)

Comments

anonamouse 1 year ago
"That segment of the economy was responsible for 110% of all manufacturing growth..." 110%? What an overachiever that segment must be!

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