NIST Technical Note 1935

Annual Manufacturing Review

Douglas S. Thomas

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NIST Technical Note 1935

Annual Manufacturing Review

Douglas S. Thomas

Applied Economics Office

Engineering Laboratory

October 2016

U.S. Department of Commerce 

Penny Pritzker, Secretary

National Institute of Standards and Technology 

Willie May, Under Secretary of Commerce for Standards and Technology and Director

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Certain commercial entities, equipment, or materials may be identified in this

document in order to describe an experimental procedure or concept adequately.

Such identification is not intended to imply recommendation or endorsement by the

National Institute of Standards and Technology, nor is it intended to imply that the

entities, materials, or equipment are necessarily the best available for the purpose. 

National Institute of Standards and Technology Technical Note XXX

Natl. Inst. Stand. Technol. Tech. Note 1935, 48 pages (October 2016)

CODEN: NTNOEF

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Preface

This study was conducted by the Applied Economics Office (AEO) in the Engineering

Laboratory (EL) at the National Institute of Standards and Technology (NIST). The 

study provides aggregate manufacturing industry data and industry subsector data to 

develop a quantitative depiction of the U.S. manufacturing industry.

Disclaimer

Certain trade names and company products are mentioned in the text in order to adequately specify the 

technical procedures and equipment used. In no case does such identification imply recommendation or 

endorsement by the National Institute of Standards and Technology, nor does it imply that the products are 

necessarily the best available for the purpose.

Cover Photographs Credits

At the Paint Shop in Chrysler Group’s Sterling Heights (Mich.) Assembly Plant, a 2015 Chrysler 200 

moves through the Underbody Sealing and Underbody Coating station, flipping the vehicle body 

completely upside down to seal all appropriate seams and compartments. (2014). This image was used in 

accordance with Fiat Chrysler Automobile’s editorial use policy.
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Acknowledgements

The authors wish to thank all those who contributed so many excellent ideas and 

suggestions for this report. Special appreciation is extended to Simon Frechette, 

Katherine Morris, and Dr. Vijay Srinivasan of EL’s Systems Integration Division for 

their technical guidance, suggestions, and support. Special appreciation is also extended 

to Juan Fung and David Butry of EL’s AEO and to David Pitchure of MML’s 

Mechanical Performance Group for their thorough reviews and many insights. The author 

also wishes to thank Dr. Nicos Martys, of the Materials and Structural Systems Division 

for his review.
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Table of Contents

PREFACE .................................................................................................................................................. II

ACKNOWLEDGEMENTS ...........................................................................................................................IV

TABLE OF CONTENTS.......................................................................................................................VI

LIST OF FIGURES..............................................................................................................................VII

LIST OF TABLES................................................................................................................................VII

LIST OF ACRONYMS .......................................................................................................................VIII

EXECUTIVE SUMMARY ............................................................................................................................. 1

1 INTRODUCTION .............................................................................................................................. 5

1.1 BACKGROUND............................................................................................................................... 5

1.2 PURPOSE...................................................................................................................................................6

1.3 SCOPE AND APPROACH................................................................................................................... 6

2 VALUE ADDED................................................................................................................................. 9

2.1 INTERNATIONAL COMPARISON ......................................................................................................... 9

2.2 DOMESTIC DETAILS...................................................................................................................... 11

3 MANUFACTURING SUPPLY CHAIN ................................................................................................ 23

4 EMPLOYMENT AND COMPENSATION ........................................................................................... 33

5 INNOVATION AND COMPETITIVENESS.......................................................................................... 39

6 DISCUSSION.................................................................................................................................. 45
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List of Figures

Figure 2.1: National 25 Year Compound Annual Growth, by Country (1989 to 2014)................ 10

Figure 2.2: National 5 Year Compound Annual Growth, by Country (2009 to 2014).................. 10

Figure 2.3: Manufacturing Value Added, Top 10 Manufacturing Countries (1970 to 2014) ....... 11

Figure 2.4: Manufacturing Value Added Per Capita, Top 10 Manufacturing Countries (1970 to 

2013).............................................................................................................................................. 12

Figure 2.5: Manufacturing Per Capita Ranking............................................................................. 12

Figure 2.6: Cumulative Percent Change in Value Added (2009 Chained Dollars)....................... 17

Figure 2.7: Value Added for Durable Goods by Type (chained dollars), 2006-2015 ................... 18

Figure 2.8: Value Added for Nondurable Goods by Type (chained dollars), 2006-2015 ............. 18

Figure 2.9: Manufacturing Value Added by Subsector (chained dollars)..................................... 19

Figure 2.10: Value Added for Durable Goods by Type (constant dollars), 2006-2015 ................ 20

Figure 2.11: Value Added for Nondurable Goods by Type (constant dollars), 2006-2015 .......... 20

Figure 2.12: Manufacturing Value Added by Subsector (constant dollars).................................. 21

Figure 2.13: Construction Put in Place, 2006-2016....................................................................... 22

Figure 3.1: Manufacturing Supply Chain...................................................................................... 24

Figure 4.1: Cumulative Change in Percent in Manufacturing Employment (Seasonally Adjusted), 

2006-2016...................................................................................................................................... 35

Figure 4.2: Manufacturing Fatalities and Injuries......................................................................... 36

Figure 4.3: Average Weekly Hours for All Employees (Seasonally Adjusted)............................ 37

Figure 4.4: Average Hourly Wages for Manufacturing and Private Industry (Seasonally Adjusted)

....................................................................................................................................................... 37

Figure 4.5: Manufacturing Employee Compensation (Hourly)..................................................... 38

Figure 5.1: IMD World Competitiveness Rankings for the US .................................................... 41

Figure 5.2: World Economic Forum 2015-2016 Global Competitiveness Index: US Rankings .. 42

List of Tables

Table 2-1: Manufacturing Activity by Economic Measure by Subsector..................................... 14

Table 3-1: Supply Chain Entities and Contributions..................................................................... 23

Table 3-2: Direct and Indirect Manufacturing Value Added ($millions 2014)............................. 25

Table 3-3: Top 20 Supply Chain Entities for Selected Manufacturing Subsectors....................... 27

Table 3-4: Top 20 Occupation Categories for Selected Manufacturing Subsectors...................... 30

Table 4-1: Employment, Annual Survey of Manufactures............................................................ 33

Table 4-2: Employment by Industry for 2013 and 2014 (Thousands): Current Population Survey

....................................................................................................................................................... 34

Table 4-3: Manufacturing Employment (Thousands): Current Employment Statistics................ 34

Table 4-4: Fatal Occupational Injuries by Event or Exposure ...................................................... 36

Table 4-5: Total Recordable Cases of Nonfatal Injuries and Illnesses, Private Industry .............. 36

Table 5-1: Patent Applications per Million People ....................................................................... 39

Table 5-2: Research and Development Expenditures as a Percent of GDP .................................. 40

Table 5-3: Researchers per Million People ................................................................................... 40

Table 5-4: Journal Articles per Million People ............................................................................. 41

Table 5-5: US Rank for Indicators used in the World Economic Forum Competitiveness Index 43

Table 5-6: Problematic Factors for Doing Business (16 total possible factors ranked) ................ 44
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List of Acronyms

ASM: Annual Survey of Manufactures

BEA: Bureau of Economic Analysis

GDP: Gross Domestic Product

IBRD: International Bank for Reconstruction and Development

IDA: International Development Association

ISIC: International Standard Industrial Classification

MAPI: Manufacturers Alliance for Productivity and Innovation

NAICS: North American Industry Classification System

NIST: National Institute of Standards and Technology

PPP: Purchasing Power Parity

SIC: Standard Industrial Classification 

UNSD: United Nations Statistics Division
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Executive Summary

The purpose of this report is to track domestic manufacturing activity and its supply chain

in order to develop a quantitative depiction of U.S. manufacturing in the context of the 

domestic economy and global industry. This depiction provides change agents, such as 

public entities and trade groups that invest in advancing the current state of 

manufacturing, insight into the current state and recent trends in US manufacturing. The 

report further identifies areas of manufacturing that can have large impacts on costs.

The US remains a major manufacturing nation; however, production and innovation is 

increasing rapidly in other countries. US manufacturing was significantly impacted by the 

previous recession and has not returned to pre-recession levels of production or 

employment. However, between March of 2014 and March of 2015, construction of 

manufacturing facilities increased significantly, suggesting a rapid increase in investment 

in US manufacturing that slightly exceeds pre-recession levels. 

The US has advantages in technological prowess, innovation, productivity, and research 

and development; however, education was ranked low in two indices (i.e., IMD World 

Competitiveness Index and the World Economic Forum’s Global Competitiveness Index)

and ranked high as being a problematic factor for doing business, which could negatively 

impact US advantages in the future. Institutions and institutional framework, which 

include crime, regulatory frameworks, country credit rating, and government spending 

among other things, was ranked low in two indices. A number of costs were identified as 

challenges to US manufacturing, including high labor costs. 

An input-output analysis of US manufacturing reveals that management is a significant 

cost along with a number of other non-production costs such as wholesale trade. The 

number of injuries and the injury rate in US manufacturing has a general downward 

trend, benefiting employees; however, manufacturing employee compensation has only 

grown slowly in recent years.

International Comparison – Manufacturing Growth: As seen in Figure 2.1, US 

compound real (controlling for inflation) annual growth between 1989 and 2014 (i.e., 25-

year growth) was 2.2 %, which places the US in the 47th percentile of all countries. This 

growth exceeded that of Germany, France, Canada, Japan, and Australia; however, it is 

slower than the global average (3 %) and that of many emerging economies. As seen in 

Figure 2.2, the compound annual growth for the US between 2009 and 2014 (i.e., 5-year

growth) was 0.4 %. This puts the US at the 29th percentile below Japan and Germany.

International Comparison – Manufacturing Industry Size: As seen in Figure 2.3, US 

manufacturing value added, as measured in constant 2005 dollars, is the second largest 

just behind that of China. In current dollars, the US produced $1.8 trillion in 

manufacturing valued added while China produced $1.9 trillion. Among the ten largest 

manufacturing countries, the US is the 3rd largest manufacturing value added per capita, 

as seen in Figure 2.4. Out of all countries the US ranks 17th, as seen in Figure 2.5.
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International Comparison – Innovation and Competitiveness: As seen in Table 5-1, the 

US ranked 3rd in 2014 in patent applications per million people, which puts it above the 

90th percentile. The US ranked 10th in research and development as a percent of GDP in 

2012, which puts at the 90th percentile. In terms of researchers per million people, the US 

ranked 20th,putting it at the 75th percentile. In journal articles per million people it ranked 

21st putting it at the 91st percentile.

The IMD Competitiveness Index ranks the US as 3rd among 60 countries in 

competitiveness for conducting business. The US ranks low in public finance, prices, and 

fiscal policy, as seen in Figure 5.1.

The Competitive Industrial Performance Index, published by the United Nations 

Industrial Development Organization, ranked the US 3rd in its economic performance in 

2014. This index assesses an economy’s ability to competitively produce and export 

manufactured goods.

The Deloitte Global Manufacturing Competitiveness Index uses a survey of CEOs to rank 

countries based on managerial perception. The US was ranked 2nd out of 40 nations. 

High-cost labor, high corporate tax rates, and increasing investments outside of the US 

were identified as challenges to US industry. Manufacturers indicated that companies 

were building high-tech factories in the US due to rising labor costs in China, shipping 

costs, and low cost shale gas in the US.

The World Economic Forum’s 2015-2016 Global Competitiveness Report uses 12 items 

to assess the competitiveness of 140 economies. As seen in Figure 5.2, the US was 

ranked 3rd with low rankings in macroeconomic environment, health and primary 

education, and institutions.

Domestic Focus – Types of Goods Produced: The largest manufacturing subsector in the 

US is chemical manufacturing followed by computer/electronic products followed by 

food, beverage, and tobacco products, as seen in Figure 2.12. The compound annual 

growth rate, calculated using the PPI, for these sectors are 0.7 %, 3.6 %, and -0.6 %, 

respectively.

Domestic Focus – Economic Recovery: As illustrated in Figure 2.6, manufacturing 

declined significantly in 2008 and has nearly returned to its peak level occurring in 2007. 

Manufacturing value added declined more than total US GDP, creating a persistent gap. 

The result is that first quarter GDP is 10.2 % above its pre-recession peak level while 

manufacturing is at 1.1 % below its peak level. Moreover, manufacturing value added has 

not returned to pre-recession levels. However, between March of 2014 and March of 

2015, manufacturing construction increased 53 %, suggesting a rapid increase in 

investment in US manufacturing. This growth is largely due to construction of chemical 

manufacturing facilities, but may have reached a plateau, as July 2016 manufacturing 

construction is down 6 % from July of the previous year (see Figure 2.13).
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Between January of 2006 and January of 2010, manufacturing employment declined by 

19.4 %, as seen in Figure 4.1. As of July 2016, employment in manufacturing is still 

13.4 % below its 2006 level. Moreover, manufacturing employment has not returned to 

pre-recession levels.

Domestic Focus – Manufacturing Supply Chain Costs: As seen in Table 3-4, wholesale 

trade, the management of companies and enterprises, and oil and gas extraction is a major 

supply chain cost for manufacturing as a whole and among selected subsectors. As seen 

in Table 3-5, management occupations, business and financial operations, top executives, 

operations specialties managers, and business operations specialists occupations are 

major labor costs for manufacturing as a whole and among selected subsectors. In 2014, 

the US imported approximately 23.1 % of its intermediate imports, as seen in Table 3-3. 

As a proportion of output and imports (i.e., a proportion of the total inputs), intermediate 

imports represented 13.0 %.

Domestic Focus – Manufacturing Safety and Compensation: As seen in Figure 4.2, 

fatalities, injuries, and the injury rate have had an overall downward trend since 2000. 

Nonfatal injuries per 100 full-time workers has declined from 9.0 in 2000 to 4.0 in 2014. 

As seen in Figure 4.5, employee compensation, which includes benefits, has had a 5-year 

compound annual growth of 1 %.

 
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1 Introduction

1.1 Background

Public entities have a significant role in the US innovation system.1 The federal 

government has had a substantial impact in developing, supporting, and nurturing 

numerous innovations and industries, including the Internet, telecommunications, 

aerospace, semiconductors, computers, pharmaceuticals, and nuclear power among 

others, many of which may not have come to fruition without public support.2 Although 

the Defense Advanced Research Projects Agency (DARPA), Small Business Innovation 

Research Program (SBIR), and Advanced Technology Program (ATP) have received 

attention in the scholarly community, there is generally limited awareness of the 

government’s role in US innovation. The vastness and diversity of US federal research 

and development programs along with their changing nature make them difficult to 

categorize and appreciate,3but even the origins of Google are rooted in a public grant 

through the National Science Foundation.4, 5 One objective of public innovation is to 

enhance economic security and improve our quality of life6, which is achieved in part by 

advancing efficiency in which resources are consumed or impacted by production. For 

example, the National Institute of Standards and Technology (NIST) has expended 

resources in supporting the development of the International Standard for the Exchange 

of Product Model Data (STEP),7 which reduces the need for duplicative efforts such as 

re-entering design data. Another effort to advance efficiency is the development of the 

Core Manufacturing Simulation Data (CMSD) specification, which enables data 

exchange for manufacturing simulations.8

To achieve economy-wide efficiency improvements, researchers have suggested that “the 

supply chain must become the focus of policy management, in contrast to the traditional 

 

1 Block, Fred L and Matthew R. Keller. State of Innovation: The US Government’s Role in Technology 

Development. New York, NY; Taylor & Francis; 2016.

2 Wessner CW and Wolff AW. Rising to the Challenge: US Innovation Policy for the Global Economy. 

National Research Council (US) Committee on Comparative National Innovation Policies: Best Practice 

for the 21st Century. Washington (DC): National Academies Press (US). 2012. 

<http://www.ncbi.nlm.nih.gov/books/NBK100307/>

3 Block at 27. 

4 National Science Foundation. “On the Origins of Google.” 

<https://www.nsf.gov/discoveries/disc_summ.jsp?cntn_id=100660>

5 Block, Fred L and Matthew R. Keller. State of Innovation: The US Government’s Role in Technology 

Development. New York, NY; Taylor & Francis; 2016: 23. 

6 National Institute of Standards and Technology. “NIST General Information.” 

<http://www.nist.gov/public_affairs/general_information.cfm>

7 Robert D. Niehaus, Inc. Reassessing the Economic Impacts of the International Standard for the Exchange 

of Product Model Data (STEP) on the US Transportation Equipment Manufacturing Industry. November 

26, 2014. Contract SB1341-12-CN-0084.

8 Lee, Yung-Tsun Tina, Frank H. Riddick, and Björn Johan Ingemar Hohansson (2011). “Core 

Manufacturing Simulation Data – A Manufacturing Simulation Integration Standard: Overview and Case 

Studies.” International Journal of Computer Integrated Manufacturing. vol 24 issue 8: 689-709.
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emphasis on single technologies/industries.” 9 System-level inefficiencies can result from 

companies working independently from one another. For instance, the “bullwhip effect”

is an example where variations in demand are magnified through a supply chain.10, 11

Another issue lies in the location of supply chain entities. Manufacturers individually 

decide on the location of production; however, individual decisions may not result in an 

efficient national supply chain arrangement. Firm level analyses of data can be a source 

of inefficiencies, as this can hide the economy-wide impacts. For example, a firm might 

conclude that their transportation cost represents a small portion of their total; however, it 

is reasonable to expect that they would not consider their suppliers’ transportation costs 

included in material purchases. The result is that the true cost of transportation through 

the manufacturing life-cycle may not be examined at the firm level.

1.2 Purpose

The purpose of this report is to track domestic manufacturing activity and its supply chain

in order to develop a quantitative depiction of U.S. manufacturing in the context of the 

domestic economy and global industry. This depiction provides change agents, such as 

public entities and trade groups that invest in advancing the current state of 

manufacturing, insight into the current state and recent trends in US manufacturing. The 

report further identifies areas of manufacturing that can have large impacts on costs.

1.3 Scope and Approach

There are numerous aspects one could examine in manufacturing. This report discusses a 

subset of stakeholders and focuses on US manufacturing. Among the many datasets 

available, it utilizes those that are prominent and are consistent with economic standards. 

These boundaries are further discussed below.

Stakeholders: This report focuses on the employees and the owners/investors, as the data

available facilitates examining these entities. Future work may move toward examining 

other stakeholders in manufacturing, such as the consumers and general public.

Geographic Scope: Many change agents are concerned with a certain group of people or 

organizations. Since NIST is concerned with "US innovation and competitiveness," this 

report focuses on activities within the national borders. In a world of globalization, this 

effort is challenging, as some of the parts and materials being used in US manufacturing 

activities are imported. The imported values are a relatively small percentage of the total

activity. The U.S. imported 10.8 % of its supply chain, as measured in terms of 2009 

imported value added (i.e., supply chain value added used by a nation’s manufacturing 

industry as a percent of all value added associated with that nation’s manufacturing

 

9 Tassey Gregory. (2010) “Rationales and Mechanisms for Revitalizing US Manufacturing R&D 

Strategies.” Journal of Technology Transfer. 35. 283-333.

10 Lee, H. L., P. Padmanabhan, and S. Whang. The Bullwhip Effect in Supply Chains. Sloan Management 

Review. 38 (1997) 93-102.

11 Bray, Robert L. and Haim Mendelson. Management Science. “Information Transmission and the 

Bullwhip Effect: An Empirical Investigation.” March 2012. 860-875: 

<http://dx.doi.org/10.1287/mnsc.1110.1467>
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industry).

12 These imports have environmental impacts, require natural resources, and 

utilize labor; thus, they are important in regards to a firm’s production. NIST, however, 

promotes US innovation and industrial competitiveness; therefore, the imported goods 

and services are outside of the scope of this report.

Standard Data Categorization: US domestic data tends to be organized using the NAICS, 

which is the standard used by federal statistical agencies classifying business 

establishments in the United States. NAICS was jointly developed by the US Economic 

Classification Policy Committee, Statistics Canada, and Mexico’s Instituto Nacional de 

Estadística y Geografía, and was adopted in 1997. NAICS has several major categories 

each with subcategories. Historic data and some organizations continue to use the 

predecessor of NAICS, which is the Standard Industrial Classification system (SIC). 

NAICS codes are categorized at varying levels of detail. The broadest level of detail is 

the two digit NAICS code, which has 20 categories. More detailed data is reported as the 

number of digits increase; thus, three digits provide more detail than the two digit and the 

four digit provides more detail than the three digit. The maximum is six digits. 

Sometimes a two, three, four, or five digit code is followed by zeros, which do not 

represent categories. They are null or place holders. For example, the code 336000 

represents NAICS 336. International data tends to be in the International Standard 

Industrial Classification (ISIC) version 3.1, a revised United Nations system for 

classifying economic data. Manufacturing is broken into 23 major categories (ISIC 15 

through 37) with additional subcategories. This data categorization works similar to 

NAICS in that additional digits represent additional detail. 

Data Sources: Thomas (2012) explores a number of data sources for examining US 

manufacturing activity.13 This report selects from sources that are the most prominent and 

reveal the most information about the US manufacturing industry. These data include the 

United Nations Statistics Division’s National Accounts Main Aggregates Database and 

the US Census Bureau’s Annual Survey of Manufactures, among others.14 Because the 

data sources are scattered across several resources, there are differences in what yearly 

data is available for a particular category or topic. In each case, the most-up-to-date and 

available information is provided for the relevant category.

 

12 Thomas, Douglas S. The US Manufacturing Value Chain: An International Perspective. February 2014. 

NIST Technical Note 1810. <http://www.nist.gov/customcf/get_pdf.cfm?pub_id=914022>

13 Thomas, Douglas S. The Current State and Recent Trends of the US Manufacturing Industry. NIST 

Special Publication 1142. <http://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.1142.pdf>

14 See <http://unstats.un.org/unsd/snaama/dnlList.asp> and <http://www.census.gov/manufacturing/asm/>
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2 Value Added

Value added is the primary metric used to measure economic activity. It is the increase in 

the value of output at a given stage of production; that is, it is the value of output minus 

the cost of inputs from other firms.15 The primary elements that remain after subtracting 

inputs is taxes, compensation to employees, and gross operating surplus; thus, the sum of 

these also equal value added. Gross operating surplus is used to calculate profit, which is 

gross operating surplus less the depreciation of capital such as buildings and machinery.

The sum of all value added for a country is that nation’s Gross Domestic Product (GDP). 

2.1 International Comparison

There are a number of sources of international estimates of value added for 

manufacturing. The United Nations Statistics Division National Accounts Main 

Aggregates Database has a very complete dataset that covers a large number of countries 

over a significant period of time. In 2014, there was $9.8 trillion in value added (i.e.,

GDP) by global manufacturing, which is 18 % of the value added by all industries ($55.1 

trillion), according to the United Nations Statistics Division. The top 5 manufacturing 

countries accounted for $5.7 trillion or 58.3 % of manufacturing value added: China 

(19.1 %), United States (18.4 %), Japan (10.2 %), Germany (6.9 %), and South Korea

(3.7 %).16

As seen in Figure 2.1, US compound real (controlling for inflation) annual growth 

between 1989 and 2014 was 2.2 %, which places the US in the 47

th percentile of all 

countries. This growth exceeded that of Germany, France, Canada, Japan, and Australia; 

however, it is slower than the global average (3 %) and that of many emerging 

economies. It is important to note that emerging economies can employ idle or 

underutilized resources and adopt technologies that are already proven in other nations to 

achieve high growth rates. Developed countries are already utilizing resources and are 

employing advanced technologies; thus, comparing US growth to the high growth rates in 

China or India has limited meaning. As seen in Figure 2.2, the compound annual growth 

for the US between 2009 and 2014 was 0.4 %. This puts the US at the 29th percentile 

below Japan and Germany.

As see in Figure 2.3, US manufacturing value added, as measured in constant 2005 

dollars, is the second largest just behind that of China. In current dollars, the US 

produced $1.8 trillion in manufacturing valued added while China produced $1.9 trillion.

Among the ten largest manufacturing countries, the US is the 3rd largest manufacturing 

value added per capita, as seen in Figure 2.4. Out of all countries the US ranks 17th, as 

seen in Figure 2.5. This ranking is improved from the early 1990’s where it was ranked as 

low as the 21st largest, but it is down since 2010 where it was ranked 14th. It is important 

to note that there are varying means for adjusting data that can change the rankings. The 

 

15 Dornbusch, Rudiger, Stanley Fischer, adn Richard Startz. 2000. Macroeconomics. 8th ed. London, UK: 

McGraw-Hill.

16 United Nations Statistics Division. “National Accounts Main Aggregates Database.” 

<http://unstats.un.org/unsd/snaama/Introduction.asp>
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Figure 2.1: National 25 Year Compound Annual Growth, by Country (1989 to 2014)

Figure 2.2: National 5 Year Compound Annual Growth, by Country (2009 to 2014)

Australia, 1.1%

Canada, 1.1%

Germany, 1.3%

Japan, 1.4%

France, 1.5%

United States, 2.2%

Finland, 2.5%

Mexico, 2.7%

World, 3.0%

Ireland, 5.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

25th 

Percentile

50th 

Percentile

75th 

Percentile

100th 

Percentile

Finland, -0.2%

Australia, 0.1%

Ireland, 0.2%

France, 0.2%

United States, 0.4%

Japan, 0.7%

World, 0.8%

Mexico, 0.9%

Germany, 1.1%

China, People's 

Republic of, 1.8%

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

25th 

50th 

Percentile

75th 

Percentile

100th 

Percentile
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Canada

Mexico

United Kingdom

Italy

France

India

Germany

Japan

China

United States

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

2012

$Billions (2005)

UNSD data uses market exchange rates while others might use purchasing power parity 

(PPP) exchange rates. PPP is the rate that a currency in one country would have to be 

converted to purchase the same goods and services in another country. The drawback of 

PPP is that it is difficult to measure and methodological questions have been raised about 

some surveys that collect data for these calculations.17 Market based rates tend to be 

relevant for internationally traded goods;

18 therefore, this report utilizes these rates. 

2.2 Domestic Details

Annual Survey of Manufactures: According to the 2014 Annual Survey of Manufactures 

(ASM) data shown in Table 2-1, the manufacturing sector produced $2400 billion in 

value added in 2014, up 1.2 % from $2356 billion in 2013.

19 Value added in machinery 

manufacturing (NAICS 333), computer and electronic product manufacturing (NAICS 

334), electrical equipment (NAICS 335), and transportation equipment (NAICS 336)

Figure 2.3: Manufacturing Value Added, Top 10 Manufacturing Countries (1970 to 2014)

 

17 Callen, Tim. March 2007. PPP Versus the Market: Which Weight Matters? Finance and Development. 

Vol 44 number 1. <http://www.imf.org/external/pubs/ft/fandd/2007/03/basics.htm>

18 Ibid.

19 Census Bureau. “Annual Survey of Manufactures.” February 2015. Accessed from the American 

FactFinder. <http://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml> and Census Bureau. “Economic 

Census.” March 2015. Accessed from the American FactFinder. 

<http://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml>
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India

China

Mexico

United Kingdom

France

Canada

Italy

United States

Japan

Germany

0

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3000

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5000

6000

7000

8000

9000

1970

1973

1976

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1982

1985

1988

1991

1994

1997

2000

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2012

Dollars (2005)

Figure 2.4: Manufacturing Value Added Per Capita, Top 10 Manufacturing Countries (1970 to 2013)

Figure 2.5: Manufacturing Per Capita Ranking

0

5

10

15

20

25

19701972197419761978198019821984198619881990199219941996199820002002200420062008201020122014

Manufacturing Per Capita Ranking

United States

Germany

Japan
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grew 5.1 %, -0.7 %, 2.8 %, and 7.8 % respectively. Shipments increased 1.2 % over the 

same period to a total of $5881 billion. The ASM calculation of value added is equal to 

the value of shipments less the cost of materials, supplies, containers, fuel, purchased 

electricity, and contract work. It is adjusted by the addition of value added by 

merchandising operations plus the net change in finished goods and work-in-process 

goods:

ASM Value Added = shipments − net inventories shipped −

suppliers of materials + merchandising operations

Value added avoids the duplication caused from the use of products of some 

establishments as materials. It is important to note that the Bureau of Economic Analysis 

(BEA) and the ASM calculate value added differently. The BEA, which follows the more 

traditional method, calculates value added as “gross output (sales or receipts and other 

operating income, plus inventory change) less intermediate inputs (consumption of goods 

and services purchased from other industries or imported).” Moreover, the difference is 

that ASM’s calculation of value added includes purchases from other industries such as 

mining and construction while BEA’s does not include it. Table 2-1 has both the ASM’s 

calculation and a calculation that follows the more traditional approach.

Net income, which could also be referred to as profit, was $798 billion in 2014, which 

equates to 16.3 % of expenditures. Net income as a percent of expenditures for machinery 

manufacturing (NAICS 333), computer and electronic product manufacturing (NAICS 

334), electrical equipment (NAICS 335), and transportation equipment (NAICS 336) was 

17.5 %, 11.8 %, 19.2 %, and 11.4 %. 
14

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Table 2-1: Manufacturing Activity by Economic Measure by Subsector

2013 2014 Percent

($Billions 2013) ($Billions 2014) Change

I. Manufacturing Shipments and Value Added

a. TOTAL MANUFACTURING

i. Net Inventories Shipped -9.41 -5.71 39.3%

ii. Depreciation of Capital 185.51 187.78 1.2%

iii. Net Income 791.24 798.22 0.9%

iv. Expenditures 4 842.41 4 900.60 1.2%

a. Suppliers of Materials 3 463.51 3 486.76 0.7%

v. Shipments (i + ii + iii + iv) 5 809.74 5 880.89 1.2%

vi. ASM Value Added = v - i - iv.a + adjustment[1] 2 356.03 2 400.06 1.9%

vii. Value Added = v - i - iv + Compensation [2] 1 766.85 1 789.23 1.3%

viii. BEA Value Added 1 829.50 1 922.90 5.1%

b. NAICS 324: Petroleum & coal products mfg

i. Net Inventories Shipped 0.39 8.48 2078.0%

ii. Depreciation of Capital 10.94 10.09 -7.8%

iii. Net Income 62.02 35.94 -42.0%

iv. Expenditures 779.45 732.00 -6.1%

a. Suppliers of Materials 722.51 681.48 -5.7%

v. Shipments (i + ii + iii + iv) 852.80 786.51 -7.8%

vi. ASM Value Added = v - i - iv.a + adjustment 129.96 96.58 -25.7%

vii. Value Added = v - i - iv + Compensation 85.99 59.29 -31.1%

c. NAICS 325: Chemical mfg

i. Net Inventories Shipped -1.28 0.06 104.8%

ii. Depreciation of Capital 30.22 30.34 0.4%

iii. Net Income 195.73 197.96 1.1%

iv. Expenditures 560.94 560.33 -0.1%

a. Suppliers of Materials 416.10 406.86 -2.2%

v. Shipments (i + ii + iii + iv) 785.62 788.69 0.4%

vi. ASM Value Added = v - i - iv.a + adjustment 371.17 382.01 2.9%

vii. Value Added = v - i - iv + Compensation 294.92 298.34 1.2%

d. NAICS 326: Plastics & rubber products mfg

i. Net Inventories Shipped -0.71 -0.63 10.5%

ii. Depreciation of Capital 9.78 10.19 4.2%

iii. Net Income 24.95 23.89 -4.2%

iv. Expenditures 191.75 201.75 5.2%

a. Suppliers of Materials 122.13 127.67 4.5%

v. Shipments (i + ii + iii + iv) 225.76 235.20 4.2%

vi. ASM Value Added = v - i - iv.a + adjustment 104.34 108.24 3.7%

vii. Value Added = v - i - iv + Compensation 76.17 77.18 1.3%
15

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2013 2014 Percent

($Billions 2013) ($Billions 2014) Change

e. NAICS 327: Nonmetallic mineral product mfg

i. Net Inventories Shipped-0.38-0.30 22.5%

ii. Depreciation of Capital 8.15 8.73 7.0%

iii. Net Income 11.94 11.99 0.5%

iv. Expenditures 86.47 93.24 7.8%

a. Suppliers of Materials 47.26 50.11 6.0%

v. Shipments (i + ii + iii + iv) 106.18 113.67 7.0%

vi. ASM Value Added = v - i - iv.a + adjustment 59.30 63.90 7.8%

vii. Value Added = v - i - iv + Compensation 42.40 43.99 3.8%

f. NAICS 331: Primary metal mfg

i. Net Inventories Shipped-0.21-1.22-469.5%

ii. Depreciation of Capital 8.79 8.80 0.1%

iii. Net Income 22.01 24.16 9.8%

iv. Expenditures 232.63 231.83-0.3%

a. Suppliers of Materials 175.24 174.45-0.4%

v. Shipments (i + ii + iii + iv) 263.21 263.56 0.1%

vi. ASM Value Added = v - i - iv.a + adjustment 88.10 90.39 2.6%

vii. Value Added = v - i - iv + Compensation 62.59 64.92 3.7%

g. NAICS 332: Fabricated metal product mfg

i. Net Inventories Shipped-1.24-2.27-83.0%

ii. Depreciation of Capital 13.78 14.25 3.4%

iii. Net Income 37.28 39.93 7.1%

iv. Expenditures 297.28 307.05 3.3%

a. Suppliers of Materials 162.85 168.70 3.6%

v. Shipments (i + ii + iii + iv) 347.10 358.96 3.4%

vi. ASM Value Added = v - i - iv.a + adjustment 185.66 192.56 3.7%

vii. Value Added = v - i - iv + Compensation 138.87 144.93 4.4%

h. NAICS 333: Machinery mfg

i. Net Inventories Shipped-0.54-2.62-387.8%

ii. Depreciation of Capital 10.72 10.91 1.8%

iii. Net Income 51.16 58.55 14.4%

iv. Expenditures 332.18 333.61 0.4%

a. Suppliers of Materials 207.87 207.20-0.3%

v. Shipments (i + ii + iii + iv) 393.53 400.44 1.8%

vi. ASM Value Added = v - i - iv.a + adjustment 186.46 195.94 5.1%

vii. Value Added = v - i - iv + Compensation 140.41 148.32 5.6%

i. NAICS 334: Computer & electronic product mfg

i. Net Inventories Shipped-0.27 0.53 296.0%

ii. Depreciation of Capital 14.69 14.51-1.2%

iii. Net Income 28.39 30.66 8.0%

iv. Expenditures 265.72 259.00-2.5%

a. Suppliers of Materials 130.36 127.11-2.5%

v. Shipments (i + ii + iii + iv) 308.53 304.70-1.2%

vi. ASM Value Added = v - i - iv.a + adjustment 178.39 177.11-0.7%

vii. Value Added = v - i - iv + Compensation 124.88 125.11 0.2%
16

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2013 2014 Percent

($Billions 2013) ($Billions 2014) Change

j. NAICS 335: Electrical equipment, appliance, & component mfg

i. Net Inventories Shipped -0.33 -0.21 37.2%

ii. Depreciation of Capital 3.47 3.52 1.6%

iii. Net Income 19.14 19.65 2.6%

iv. Expenditures 101.23 102.53 1.3%

a. Suppliers of Materials 64.17 64.40 0.4%

v. Shipments (i + ii + iii + iv) 123.51 125.50 1.6%

vi. ASM Value Added = v - i - iv.a + adjustment 59.63 61.32 2.8%

vii. Value Added = v - i - iv + Compensation 46.23 47.15 2.0%

k. NAICS 336: Transportation equipment mfg

i. Net Inventories Shipped -3.28 -4.47 -36.2%

ii. Depreciation of Capital 23.61 25.36 7.4%

iii. Net Income 77.47 90.57 16.9%

iv. Expenditures 743.22 791.88 6.5%

a. Suppliers of Materials 541.11 580.70 7.3%

v. Shipments (i + ii + iii + iv) 841.01 903.33 7.4%

vi. ASM Value Added = v - i - iv.a + adjustment 303.16 326.85 7.8%

vii. Value Added = v - i - iv + Compensation 222.24 241.21 8.5%

l. NAICS 339: Miscellaneous mfg

i. Net Inventories Shipped -0.08 -0.70 -824.7%

ii. Depreciation of Capital 5.12 5.15 0.5%

iii. Net Income 33.27 33.47 0.6%

iv. Expenditures 117.57 118.71 1.0%

a. Suppliers of Materials 56.98 57.53 1.0%

v. Shipments (i + ii + iii + iv) 155.89 156.63 0.5%

vi. ASM Value Added = v - i - iv.a + adjustment 98.89 99.84 1.0%

vii. Value Added = v - i - iv + Compensation 74.79 75.15 0.5%

m. Food mfg

i. Net Inventories Shipped -0.40 -0.56 -38.5%

ii. Depreciation of Capital 16.91 17.52 3.6%

iii. Net Income 118.39 121.73 2.8%

iv. Expenditures 627.95 651.82 3.8%

a. Suppliers of Materials 497.59 516.09 3.7%

v. Shipments (i + ii + iii + iv) 762.85 790.51 3.6%

vi. ASM Value Added = v - i - iv.a + adjustment 265.55 274.96 3.5%

vii. Value Added = v - i - iv + Compensation 208.10 213.81 2.7%

n. Other: Apparel, wood product, and printing mfg

i. Net Inventories Shipped -1.08 -1.81 -67.6%

ii. Depreciation of Capital 29.58 30.02 1.5%

iii. Net Income 109.24 108.13 -1.0%

iv. Expenditures 506.01 516.86 2.1%

a. Suppliers of Materials 319.34 324.46 1.6%

v. Shipments (i + ii + iii + iv) 643.75 653.20 1.5%

vi. ASM Value Added = v - i - iv.a + adjustment 325.42 330.37 1.5%

vii. Value Added = v - i - iv + Compensation 249.27 249.81 0.2%

[1] It is adjusted by the addition of value added by merchandising operations plus the net change in 

finished goods and work-in-process goods. 

[2] Compensation includes payroll and fringe benefits (not shown)
17

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Bureau of Economic Analysis – Chained Dollars: There are two primary methods for 

adjusting value added for inflation. The first is using chained dollars, which uses a 

changing basket of goods to adjust for inflation. The second uses an unchanging basket of 

goods to adjust for inflation. 20 The BEA estimate for manufacturing value added in 2015

was $2168 billion. Using chained dollars from the BEA shows that manufacturing 

increased by 0.3 % in the first quarter of 201621 and contributed 11.7 % of GDP growth 

since the first quarter of 2014.22

As illustrated in Figure 2.6, manufacturing declined significantly in 2008 and has nearly 

returned to its peak level occurring in 2007. Manufacturing value added declined more 

than total US GDP, creating a persistent gap. The result is that first quarter GDP in 2016

is 10.2 % above its pre-recession peak level while manufacturing is at 1.1 % below its 

peak level. This is largely driven by nondurable goods manufacturing, which is 7.1 % 

below its peak occurring in 2007.23

Figure 2.7 and Figure 2.8 provide data on durable and nondurable goods. As seen in 

Figure 2.7, value added for a number of durable goods is higher in 2014 than it was in 

2006, including computer and electronic products and motor vehicles. The growth in 

durable goods is largely driven by computer and electronic products. As seen in Figure 

2.8, in 2014 every category of nondurable goods except petroleum and coal products was 

below its 2006 value, including chemical manufacturing and plastics and rubber. The 

largest manufacturing subsector in the US is chemical manufacturing followed by 

computer and electronic products and food, beverage, and tobacco products, as seen in 

Figure 2.9. 

Figure 2.6: Cumulative Percent Change in Value Added (2009 Chained Dollars)

 

20 Dornbusch, Rudiger, Stanley Fischer, and Richard Startz. Macroeconomics. Eighth Edition. (Boston, 

McGraw Hill, 2001): 32. 

21 Billions of chained dollars seasonally adjusted at annual rates

22 Growth estimates were made using billions of chained 2009 dollars seasonally adjusted at annual rates.

23 Bureau of Economic Analysis. “Industry Economic Accounts Data.” 

<http://www.bea.gov/iTable/index_industry_gdpIndy.cfm>

-15%

-10%

-5%

0%

5%

10%

15%

20062007200820092010201120122013201420152016

 Gross domestic product

 Manufacturing

 Durable goods

 Nondurable goods
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Figure 2.7: Value Added for Durable Goods by Type (chained dollars), 2006-2015

Figure 2.8: Value Added for Nondurable Goods by Type (chained dollars), 2006-2015

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

 Miscellaneous manufacturing 73 74 78 80 82 79 78 75 77 79

 Furniture and related products 40 37 32 23 23 24 23 25 25 25

 Other transportation equipment 103 121 118 112 112 114 111 113 115 113

 Motor vehicles and parts 143 136 107 48 100 127 138 146 146 148

 Electrical equipment/appliances 60 57 60 50 51 49 50 51 51 50

 Computer and electronic products 180 203 228 229 256 265 276 277 286 303

 Machinery 139 145 145 116 128 145 144 141 141 135

 Fabricated metal products 158 164 154 118 129 137 142 139 145 138

 Primary metals 41 39 41 40 38 40 47 51 49 57

 Nonmetallic mineral products 51 51 47 37 37 39 40 42 43 42

 Wood products 26 27 25 21 21 23 23 23 22 23

0

200

400

600

800

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1200

Billions of Chained 2009 Dollars

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

 Plastics and rubber products 70 71 62 62 65 64 67 68 71 68

 Chemical products 315 334 305 310 330 311 296 297 294 294

 Petroleum and coal products 109 111 119 115 99 85 81 90 99 118

 Printing and related activities 45 47 46 39 40 41 41 41 41 40

 Paper products 69 64 56 59 53 51 50 50 50 49

 Apparel, leather, and allied products 13 12 12 10 11 11 10 11 11 10

 Textile mills and products 21 20 19 15 16 13 15 16 16 16

 Food, beverage, and tobacco 236 236 225 243 233 225 222 221 219 216

0

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1000

Billions of Chained 2009 Dollars
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Figure 2.9: Manufacturing Value Added by Subsector (chained dollars)

Bureau of Economic Analysis – Constant Dollars: Some concerns have been raised regarding 

the use of chained dollars to adjust for inflation; therefore, it is prudent to examine

manufacturing value added using the producer price index. Figure 2.10 and Figure 2.11

presents value added for durable and nondurable goods adjusted using the producer price 

index from the Bureau of Labor Statistics. The general trends are similar to those calculated 

using chained dollars; however, the 2015 total for manufacturing using chained dollars is 

2.5 % higher than the 2006 value while the constant dollar value is only 1.6 % higher. As 

seen in Figure 2.12, the growth in computer and electronic manufacturing is more modest 

using the producer price index, 3.6 % growth over the period compared to 6.0 %. This 

difference illustrates the concern in regards to chained dollars compared to constant dollars. Apparel, leather, and allied products (CAG5: -1.1) Textile mills and products (CAG5: 0.5) Wood products (CAG5: 1.6) Furniture and related products (CAG5: 1.2) Printing and related activities (CAG5: 0) Nonmetallic mineral products (CAG5: 2.2) Paper products (CAG5: -1.9) Electrical equipment/appliances (CAG5: -0.4) Primary metals (CAG5: 8.2) Plastics and rubber products (CAG5: 0.8) Miscellaneous manufacturing (CAG5: -0.7) Other transportation equipment (CAG5: 0.1) Petroleum and coal products (CAG5: 3.7) Machinery (CAG5: 1.0) Fabricated metal products (CAG5: 1.2) Motor vehicles and parts (CAG5: 8.2) Food, beverage, and tobacco (CAG5: -1.5) Computer and electronic products (CAG5: 3.4) Chemical products (CAG5: -2.3)

0

50

100

150

200

250

300

350

2006

2008

2010

2012

2014

Billions of Chained 2009 Dollars

NOTE: CAG5 = 5 year compound annual growth rate
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Figure 2.10: Value Added for Durable Goods by Type (constant dollars), 2006-2015

Figure 2.11: Value Added for Nondurable Goods by Type (constant dollars), 2006-2015

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

 Miscellaneous manufacturing 81 81 82 86 86 81 80 79 81 85

 Furniture and related products 41 38 32 25 24 24 24 25 26 27

 Other transportation equipment 100 116 114 115 114 116 114 119 126 129

 Motor vehicles, bodies and trailers,

and parts 156 143 102 53 100 118 131 138 142 157

 Electrical equipment, appliances, and

components 61 57 60 54 52 48 51 53 53 55

 Computer and electronic products 207 215 226 222 244 247 257 259 268 285

 Machinery 148 152 146 126 133 146 149 150 153 153

 Fabricated metal products 154 157 144 127 129 132 141 142 147 149

 Primary metals 65 62 58 43 45 49 53 53 55 58

 Nonmetallic mineral products 61 59 50 42 41 41 42 46 48 49

 Wood products 36 34 29 25 26 25 26 27 28 30

0

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600

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1400

$Billions 2015

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

 Plastics and rubber products 79 78 64 70 70 68 72 72 74 76

 Chemical products 351 360 325 366 375 354 348 353 354 375

 Petroleum and coal products 136 136 109 119 104 103 104 103 113 163

 Printing and related support activities 50 51 47 41 40 38 38 38 38 40

 Paper products 71 66 57 65 59 54 54 55 55 56

 Apparel and leather and allied products 14 13 13 11 11 11 11 11 11 11

 Textile mills and textile product mills 24 23 20 17 17 15 16 17 17 18

 Food and beverage and tobacco

products 268 247 233 289 264 228 233 236 236 254

0

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400

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1200

$Billions 2015
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Figure 2.12: Manufacturing Value Added by Subsector (constant dollars)

Construction Put in Place: Construction of new manufacturing facilities can be indicative of 

future manufacturing activities. In July of 2016, chemical manufacturing accounted for 51 % 

of construction for manufacturing, as seen in Figure 2.13. The “other” category is the next 

largest (16 %) with transportation equipment being the third (14 %). Additionally, an 

increase in manufacturing construction can be seen in the Construction Put in Place 

estimates from the Census Bureau. Between March of 2014 and March of 2015, 

manufacturing construction increased 53 %; however, this trend may have reached a Apparel and leather and allied products (CAG5: -0.7) Textile mills and textile product mills (CAG5: 0.7) Furniture and related products (CAG5: 1.8) Wood products (CAG5: 3.3) Printing and related support activities (CAG5: -0.2) Nonmetallic mineral products (CAG5: 3.3) Electrical equipment, appliances, and components (CAG5: 0.8) Paper products (CAG5: -1.0) Primary metals (CAG5: 4.9) Plastics and rubber products (CAG5: 1.6) Miscellaneous manufacturing (CAG5: -0.2) Other transportation equipment (CAG5: 2.3) Fabricated metal products (CAG5: 2.9) Machinery (CAG5: 2.8) Motor vehicles, bodies and trailers, and parts (CAG5: 9.3) Petroleum and coal products (CAG5: 9.4) Food and beverage and tobacco products (CAG5: -0.7) Computer and electronic products (CAG5: 3.1) Chemical products (CAG5: -0.0)

0

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400

2006

2008

2010

2012

2014

$Billions 2015

NOTE: CAG5 = 5 year compound annual growth rate
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plateau, as July 2016 is down 6 % from July of the previous year.24 This growth is largely 

due to construction of chemical manufacturing facilities. The Annual Survey of 

Manufactures seems to confirm that there is significant growth in capital expenditures on 

buildings for chemical manufacturing, as 10 of 29 subsectors having growth of more than 

50 % with some as much as 100 % to 200 %. 

Figure 2.13: Construction Put in Place, 2006-2016

 

24 Census Bureau. Construction Spending. Construction put in place.

<https://www.census.gov/construction/c30/c30index.html>

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

20062007200820092010201120122013201420152016

$million (2016)

Other

Transportation

equipment

Computer/

electronic/

electrical

Fabricated

metal

Nonmetallic

 mineral

Plastic/rubber

Chemical

Food/beverage

/tobacco
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3 Manufacturing Supply Chain

There are many suppliers of goods and services that have a stake in manufacturing; these 

include resellers, providers of transportation and warehousing, raw material suppliers, 

suppliers of intermediate goods, and suppliers of professional services with values from the 

ASM.25 Table 3-1 presents and Figure 3.1 maps, the purchases that the manufacturing 

industry made for production, which is disaggregated into five categories: suppliers of 

services, computer hardware, software, and other costs (blue), refuse removal, intermediate 

goods, and recycling (gold), machinery, structures, and compensation (orange), repair of the 

machinery and structures (red), and suppliers of materials (green). These items all feed into 

the design and production of manufactured goods which are inventoried and/or shipped

(gray). The depreciation of capital and net income are also included in Figure 3-1, which 

affects the market value of shipments. In addition to the stakeholders, there are also public 

vested interests, the end users, and financial service providers.

Table 3-1: Supply Chain Entities and Contributions

2013 2014 Percent

($Billions 2013) ($Billions 2014) Change

I. Services, Computer Hardware, Software, and Other Expenditures

a. Communication Services 4.73 4.81 1.7%

b. Computer Hardware, Software, and Other Equipment 7.10 12.70 79.0%

c. Professional, Technical, and Data Services 37.75 40.36 6.9%

d. Other Expenditures 267.39 286.16 7.0%

e. TOTAL 316.97 344.03 8.5%

II. Refuse Removal Expenditures 13.78 14.28 3.6%

III. Machinery, Structures, and Compensation Expenditures

a. Payroll, Benefits, and Employment 790.10 803.22 1.7%

b. Capital Expenditures: Structures (including rental) 59.52 58.04 -2.5%

c. Capital Expenditures: Machinery/Equipment (including rental) 13.72 146.29 965.9%

d. TOTAL 863.35 1007.55 16.7%

IV. Suppliers of Materials Expenditures

a. Materials, Parts, Containers, Packaging, etc... Used 3 143.32 3 158.62 0.5%

b. Contract Work and Resales 230.60 232.53 0.8%

c. Purchased Fuels and Electricity 89.59 95.61 6.7%

d. TOTAL 3 463.51 3 486.76 0.7%

V. Maintenance and Repair Expenditures 46.53 47.97 3.1%

VI. Shipments

a. Expenditures 4 704.13 4 900.60 4.2%

b. Net Inventories Shipped -9.41 -5.71 39.3%

c. Depreciation 185.51 187.78 1.2%

d. Net Income 791.24 798.22 0.9%

E. TOTAL 5 671.46 5 880.89 3.7%

 

25 Census Bureau. “Annual Survey of Manufactures.” February 2015. Accessed from the American 

FactFinder. <http://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml>
24

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Figure 3.1: Manufacturing Supply Chain
25

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Direct and Indirect Manufacturing: As previously mentioned, to achieve economy-wide 

efficiency improvements, researchers have suggested that “the supply chain must become 

the focus of policy management, in contrast to the traditional emphasis on single 

technologies/industries.” 26 As seen in Table 3-2, there is an estimated $2081 billion in 

manufacturing value added with an additional $905 billion in indirect value added from 

other industries for manufacturing, as calculated using input-output analysis.

27

In 2014, the US imported approximately 23.1 % of its intermediate imports, as seen in 

Table 3-3. As a proportion of output and imports (i.e., a proportion of the total inputs), 

intermediate imports represented 13.0 %. As can be seen in Table 3-3, these proportions 

have not changed dramatically in recent years.

A frequently invoked axiom posits that roughly 80 % of a problem is due to 20 % of the 

cause, a phenomenon referred to as the Pareto principle. 28 Moreover, a small portion of 

the cause accounts for a large portion of the problem. Identifying that small portion can 

facilitate making large efficiency improvements in manufacturing. Table 3-4 presents the 

top 20 supply chain entities by cost for manufacturing and a selection of manufacturing 

subsectors. Table 3-5 presents the top 20 occupation costs for manufacturing as a whole 

and a selection of manufacturing subsectors. For example, the data in the column labeled 

Table 3-2: Direct and Indirect Manufacturing Value Added ($millions 2014)

Value 

Added

Indirect Value Added Total

a. TOTAL MANUFACTURING 2 080 659 904 990 2 985 649

b. NAICS 333: Machinery mfg 153 534 131 272 284 805

c. NAICS 334: Computer & electronic product mfg 204 853 67 840 272 693

d. NAICS 335: Electrical equipment, appliance, & component mfg 50 228 17 722 67 949

e. NAICS 336: Transportation equipment mfg 296 465 275 118 571 583

f. NAICS 337: Furniture 28 011 33 146 61 157

g. NAICS 339: Miscellaneous mfg 81 112 49 643 130 755

h. NAICS 311-312: Food, beverage, and Tobacco mfg 255 940 362 431 618 371

i. NAICS 313-323: Textiles, apparel, leather, wood, and paper mfg

134 951 28 444 163 395

j. NAICS 324-332: Chemicals, materials and energy mfg 875 565 212 522 1 088 087

 

26 Tassey Gregory. (2010) “Rationales and Mechanisms for Revitalizing US Manufacturing R&D 

Strategies.” Journal of Technology Transfer. 35. 283-333.

27 This analysis uses an Input-Output model discussed in Thomas, Douglas and Anand Kandaswamy. 

“Identifying High Resource Consumption Areas of Assembly-Centric Manufacturing in the United States.” 

NIST Publication 921139. Unpublished. 

28 Hopp, Wallace J. and Mark L. Spearman. Factory Physics. Third Edition. (Waveland Press, Long Grove, 

IL, 2008. 674. 
26

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Table 3-3: Imported Intermediate Manufacturing 

Year

Intermediate 

Manufacturing

Intermediate 

Manufacturing 

Imports

Total Manufacturing 

Output

Intermediate Imports as 

a Percent of 

Intermediates 

Intermediate imports 

as a Percent of Total 

Output plus Imports

2006 3 247 782 714 103 4 888 467 22.0% 12.7%

2007 3 463 140 743 599 5 160 737 21.5% 12.6%

2008 3 573 053 767 370 5 276 399 21.5% 12.7%

2009 2 713 744 527 981 4 295 179 19.5% 10.9%

2010 3 088 872 664 888 4 833 972 21.5% 12.1%

2011 3 528 087 787 065 5 432 507 22.3% 12.7%

2012 3 665 614 832 938 5 680 253 22.7% 12.8%

2013 3 718 764 843 459 5 786 929 22.7% 12.7%

2014 3 887 341 897 777 6 005 642 23.1% 13.0%

“NAICS 334: Computer & Electronic Product mfg” shows the supply chain entities by 

NAICS code that contribute to producing computer and electronic products. These costs 

can be used to identify and select new projects that have the potential for having a high 

impact on manufacturing efficiency. As seen in Table 3-4, wholesale trade, the 

management of companies and enterprises, and oil and gas extraction appears in every 

list. As seen in Table 3-5, management occupations, business and financial operations, 

top executives, operations specialties managers, and business operations specialists, 

occupations are listed in every table.
27

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Table 3-4: Top 20 Supply Chain Entities for Selected Manufacturing Subsectors

NAICS 31-33: Total manufacturing NAICS 311-312 (except tobacco): Food and Beverage mfg

NAICS Description

Value Added 

($millions) NAICS Description

Value Added 

($millions)

211000 Oil and gas extraction 185 507 420000 Wholesale trade 45 965

420000 Wholesale trade 143 674 1121A0 Beef cattle ranching and farming, including feedlots 

and dual-purpose ranching and farming

21 895

550000 Management of companies and enterprises 92 690 211000 Oil and gas extraction 21 022

324110 Petroleum refineries 68 771 550000 Management of companies and enterprises 20 590

325412 Pharmaceutical preparation manufacturing 54 408 31161A Animal (except poultry) slaughtering, rendering, and 

processing

18 754

336411 Aircraft manufacturing 49 270 312120 Breweries 13 156

312200 Tobacco product manufacturing 46 357 112A00 Animal production, except cattle and poultry and eggs 13 065

336112 Light truck and utility vehicle manufacturing 33 443 112120 Dairy cattle and milk production 11 526

336111 Automobile manufacturing 24 375 311910 Snack food manufacturing 11 283

334413 Semiconductor and related device manufacturing 23 223 311810 Bread and bakery product manufacturing 11 039

1121A0 Beef cattle ranching and farming, including feedlots and 

dual-purpose ranching and farming

22 407 484000 Truck transportation 9 833

484000 Truck transportation 21 162 311615 Poultry processing 9 478

31161A Animal (except poultry) slaughtering, rendering, and 

processing

19 144 312110 Soft drink and ice manufacturing 9 242

334511 Search, detection, and navigation instruments 

manufacturing

18 876 1111A0 Oilseed farming 8 985

52A000 Monetary authorities and depository credit intermediation 16 661 311300 Sugar and confectionery product manufacturing 8 953

541100 Legal services 16 419 3118A0 Cookie, cracker, pasta, and tortilla manufacturing 8 304

334510 Electromedical and electrotherapeutic apparatus 

manufacturing

16 370 111300 Fruit and tree nut farming 7 965

336412 Aircraft engine and engine parts manufacturing 16 335 112300 Poultry and egg production 7 920

325610 Soap and cleaning compound manufacturing 16 207 311111 Dog and cat food manufacturing 6 544

325620 Toilet preparation manufacturing 16 017 324110 Petroleum refineries 6 529
28

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NAICS 333: Machinery mfg NAICS 334: Computer &electronic product mfg

NAICS Description

Value Added 

($millions) NAICS Description

Value Added 

($millions)

420000 Wholesale trade 17 444 334511 Search, detection, and navigation instruments 

manufacturing

17 015

333111 Farm machinery and equipment manufacturing 9 562 334510 Electromedical and electrotherapeutic apparatus 

manufacturing

16 073

333130 Mining and oil and gas field machinery manufacturing 8 744 334413 Semiconductor and related device manufacturing 15 354

333120 Construction machinery manufacturing 8 641 420000 Wholesale trade 9 885

550000 Management of companies and enterprises 8 411 334220 Broadcast and wireless communications equipment 8 527

333920 Material handling equipment manufacturing 7 288 550000 Management of companies and enterprises 6 347

33391A Pump and pumping equipment manufacturing 6 383 334516 Analytical laboratory instrument manufacturing 6 103

33399A Other general purpose machinery manufacturing 6 331 334515 Electricity and signal testing instruments manufacturing 5 560

33329A Other industrial machinery manufacturing 5 843 334111 Electronic computer manufacturing 5 069

211000 Oil and gas extraction 5 473 33451A Watch, clock, and other measuring and controlling 

device manufacturing

4 402

331110 Iron and steel mills and ferroalloy manufacturing 4 902 334513 Industrial process variable instruments manufacturing 4 253

333912 Air and gas compressor manufacturing 4 155 334517 Irradiation apparatus manufacturing 3 175

33331A Vending, commercial laundry, and other commercial and 

service industry machinery manufacturing

3 942 334418 Printed circuit assembly (electronic assembly) 

manufacturing

2 803

333611 Turbine and turbine generator set units manufacturing 3 585 211000 Oil and gas extraction 2 386

333514 Special tool, die, jig, and fixture manufacturing 3 341 541100 Legal services 2 177

333295 Semiconductor machinery manufacturing 3 184 334112 Computer storage device manufacturing 2 074

333511 Industrial mold manufacturing 2 920 533000 Lessors of nonfinancial intangible assets 1 810

33351A Metal cutting and forming machine tool manufacturing 2 676 541610 Management consulting services 1 559

33291A Valve and fittings other than plumbing 2 537 561300 Employment services 1 534

333415 Air conditioning, refrigeration, and warm air heating 

equipment manufacturing

2 427 334210 Telephone apparatus manufacturing 1 386
29

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NAICS 335: Electrical equipment, appliance, & component mfg NAICS 336: Transportation equipment mfg

NAICS Description

Value Added 

($millions) NAICS Description

Value Added 

($millions)

335999 All other miscellaneous electrical equipment and 

component manufacturing

2 967 336411 Aircraft manufacturing 48 828

420000 Wholesale trade 2 309 420000 Wholesale trade 43 810

335313 Switchgear and switchboard apparatus manufacturing 1 647 336112 Light truck and utility vehicle manufacturing 33 415

335221 Household cooking appliance manufacturing 1 442 550000 Management of companies and enterprises 25 436

335311 Power, distribution, and specialty transformer 

manufacturing

1 432 336111 Automobile manufacturing 24 278

335912 Primary battery manufacturing 1 414 336412 Aircraft engine and engine parts manufacturing 14 764

335222 Household refrigerator and home freezer manufacturing 1 338 336413 Other aircraft parts and auxiliary equipment 

manufacturing

13 995

335224 Household laundry equipment manufacturing 1 068 211000 Oil and gas extraction 10 926

550000 Management of companies and enterprises 1 049 336370 Motor vehicle metal stamping 9 382

211000 Oil and gas extraction 924 336611 Ship building and repairing 9 135

331110 Iron and steel mills and ferroalloy manufacturing 759 336390 Other motor vehicle parts manufacturing 7 649

335228 Other major household appliance manufacturing 724 331110 Iron and steel mills and ferroalloy manufacturing 7 513

335210 Small electrical appliance manufacturing 631 336350 Motor vehicle transmission and power train parts 

manufacturing

6 911

33441A Other electronic component manufacturing 465 336414 Guided missile and space vehicle manufacturing 5 900

33211B Crown and closure manufacturing and metal stamping 387 336360 Motor vehicle seating and interior trim manufacturing 5 636

331490 Nonferrous metal (except copper and aluminum) rolling, 

drawing, extruding and alloying

375 336120 Heavy duty truck manufacturing 5 627

335911 Storage battery manufacturing 328 484000 Truck transportation 5 138

332720 Turned product and screw, nut, and bolt manufacturing 301 336310 Motor vehicle gasoline engine and engine parts 

manufacturing

4 833

334413 Semiconductor and related device manufacturing 300 334413 Semiconductor and related device manufacturing 4 180

484000 Truck transportation 287 541100 Legal services 4 112
30

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Table 3-5: Top 20 Occupation Categories for Selected Manufacturing Subsectors

NAICS 31-33: Total manufacturing

NAICS 311-312 (except tobacco): Food and Beverage mfg (excluding agricultural 

occupations)

SOC Description

Value Added 

($millions) SOC Description

Value Added 

($millions)

510000 Production Occupations 228 030 510000 Production Occupations 51 154

110000 Management Occupations 149 100 110000 Management Occupations 30 677

430000 Office and Administrative Support Occupations 84 363 530000 Transportation and Material Moving Occupations 28 061

130000 Business and Financial Operations Occupations 84 045 430000 Office and Administrative Support Occupations 21 525

170000 Architecture and Engineering Occupations 75 810 519000 Other Production Occupations 19 629

530000 Transportation and Material Moving Occupations 65 100 410000 Sales and Related Occupations 19 055

410000 Sales and Related Occupations 63 076 130000 Business and Financial Operations Occupations 16 602

172000 Engineers 60 998 513000 Food Processing Workers 16 406

519000 Other Production Occupations 58 113 537000 Material Moving Workers 13 920

514000 Metal Workers and Plastic Workers 57 675 490000 Installation, Maintenance, and Repair Occupations 13 731

111000 Top Executives 55 762 111000 Top Executives 12 941

131000 Business Operations Specialists 53 641 111021 General and Operations Managers 10 661

512000 Assemblers and Fabricators 52 625 113000 Operations Specialties Managers 10 381

113000 Operations Specialties Managers 50 331 537060 Laborers and Material Movers, Hand 10 075

150000 Computer and Mathematical Occupations 49 611 533000 Motor Vehicle Operators 9 994

490000 Installation, Maintenance, and Repair Occupations 47 736 131000 Business Operations Specialists 9 786

151100 Computer Occupations 46 243 414010 Sales Representatives, Wholesale and Manufacturing 9 435

111021 General and Operations Managers 45 658 533030 Driver/Sales Workers and Truck Drivers 9 373

512090 Miscellaneous Assemblers and Fabricators 36 389 499000 Other Installation, Maintenance, and Repair Occupations 9 242

414010 Sales Representatives, Wholesale and Manufacturing 34 932 414012 Sales Representatives, Wholesale and Manufacturing, 

Except Technical and Scientific Products

7 790
31

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NAICS 333: Machinery mfg NAICS 334: Computer &electronic product mfg

SOC Description

Value Added 

($millions) SOC Description

Value Added 

($millions)

510000 Production Occupations 37 736 110000 Management Occupations 17 369

110000 Management Occupations 20 652 170000 Architecture and Engineering Occupations 14 774

514000 Metal Workers and Plastic Workers 18 760 510000 Production Occupations 12 351

170000 Architecture and Engineering Occupations 11 980 172000 Engineers 11 737

430000 Office and Administrative Support Occupations 11 709 150000 Computer and Mathematical Occupations 9 776

130000 Business and Financial Operations Occupations 10 506 130000 Business and Financial Operations Occupations 9 089

172000 Engineers 9 333 151100 Computer Occupations 8 796

410000 Sales and Related Occupations 8 977 430000 Office and Administrative Support Occupations 7 180

512000 Assemblers and Fabricators 8 562 151130 Software Developers and Programmers 6 509

111000 Top Executives 8 419 131000 Business Operations Specialists 6 058

530000 Transportation and Material Moving Occupations 6 731 113000 Operations Specialties Managers 5 860

113000 Operations Specialties Managers 6 701 410000 Sales and Related Occupations 5 545

131000 Business Operations Specialists 6 626 111000 Top Executives 5 340

490000 Installation, Maintenance, and Repair Occupations 6 619 512000 Assemblers and Fabricators 4 712

512090 Miscellaneous Assemblers and Fabricators 5 715 172070 Electrical and Electronics Engineers 4 336

150000 Computer and Mathematical Occupations 5 675 119000 Other Management Occupations 3 748

519000 Other Production Occupations 5 637 414010 Sales Representatives, Wholesale and Manufacturing 3 262

414010 Sales Representatives, Wholesale and Manufacturing 5 455 514000 Metal Workers and Plastic Workers 3 167

151100 Computer Occupations 4 841 132000 Financial Specialists 3 040

499000 Other Installation, Maintenance, and Repair Occupations 4 266 173000 Drafters, Engineering Technicians, and Mapping 

Technicians

2 949
32

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NAICS 335: Electrical equipment, appliance, & component mfg NAICS 336: Transportation equipment mfg

SOC Description

Value Added 

($millions) SOC Description

Value Added 

($millions)

110000 Management Occupations 2 579 110000 Management Occupations 38 418

111000 Top Executives 926 111000 Top Executives 13 584

112000 Advertising, Marketing, Promotions, Public Relations, and 

Sales Managers

373 112000 Advertising, Marketing, Promotions, Public Relations, 

and Sales Managers

4 734

112020 Marketing and Sales Managers 355 112020 Marketing and Sales Managers 4 389

113000 Operations Specialties Managers 901 113000 Operations Specialties Managers 13 624

119000 Other Management Occupations 376 119000 Other Management Occupations 6 457

119030 Education Administrators1 119030 Education Administrators 23

130000 Business and Financial Operations Occupations 1 375 130000 Business and Financial Operations Occupations 24 452

131000 Business Operations Specialists 894 131000 Business Operations Specialists 16 294

131020 Buyers and Purchasing Agents 190 131020 Buyers and Purchasing Agents 3 338

131030 Claims Adjusters, Appraisers, Examiners, and Investigators 22 131030 Claims Adjusters, Appraisers, Examiners, and 

Investigators

291

131070 Human Resources Workers 59 131070 Human Resources Workers 1 559

132000 Financial Specialists 484 132000 Financial Specialists 8 198

132050 Financial Analysts and Advisors 123 132050 Financial Analysts and Advisors 2 035

132070 Credit Counselors and Loan Officers 34 132070 Credit Counselors and Loan Officers 543

132080 Tax Examiners, Collectors and Preparers, and Revenue 

Agents

6 132080 Tax Examiners, Collectors and Preparers, and Revenue 

Agents

100

150000 Computer and Mathematical Occupations 726 150000 Computer and Mathematical Occupations 15 032

151100 Computer Occupations 702 151100 Computer Occupations 14 264

151120 Computer and Information Analysts 101 151120 Computer and Information Analysts 2 772

151130 Software Developers and Programmers 336 151130 Software Developers and Programmers 7 500
33

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4 Employment and Compensation

The Annual Survey of Manufactures estimates that there were 11.0 million employees in 

manufacturing in 2014, which is the most recent data available (see Table 4-1). The 

Current Population Survey and Current Employment Statistics have more recent data that 

estimate that there were 15.3 million and 12.3 million employees in 2015, respectively

(see Table 4-2 and Table 4-3). Each of these estimates has its own method for how the 

data was acquired and its own definition of employment. The Current Population Survey 

considers an employed person to be any individual who did any work for pay or profit 

during the survey reference week or were absent from their job because they were ill, on 

vacation, or taking leave for some other reason. It also includes individuals who 

completed at least 15 hours of unpaid work in a family-owned enterprise operated by 

someone in their household. In contrast, the Current Employment Statistics specifically 

exclude proprietors, self-employed, and unpaid family or volunteer workers; thus, the 

estimates from the Current Employment Statistics are lower than the Current Population 

Survey estimates. Additionally, the Current Employment Statistics include temporary and 

intermittent employees. The Annual Survey of Manufactures considers an employee to 

include all full-time and part-time employees on the payrolls of operating establishments 

during any part of the pay period being surveyed excluding temporary staffing obtained 

through a staffing service. It also excludes proprietors along with partners of 

unincorporated businesses.

Between 2014 and 2015, manufacturing employment increased 1.6 % according to the 

Current Population Survey (see Table 4-2) and 1.1 % according to the Current 

Employment Statistics (see Table 4-3). Meanwhile, total employment increased 1.7 % 

according to the Current Population Survey (see Table 4-3). 

Table 4-1: Employment, Annual Survey of Manufactures

2013 2014 Percent

(employees) (employees) Change

VI. Employees

a. NAICS 324: Petroleum & coal products mfg 100 216 102 408 2.2%

b. NAICS 325: Chemical mfg 718 003 714 567 -0.5%

c. NAICS 326: Plastics & rubber products mfg 702 944 716 591 1.9%

d. NAICS 327: Nonmetallic mineral product mfg 349 396 355 275 1.7%

e. NAICS 331: Primary metal mfg 388 619 382 788 -1.5%

f. NAICS 332: Fabricated metal product mfg 1 382 810 1 375 346 -0.5%

g. NAICS 333: Machinery mfg 1 050 825 1 027 684 -2.2%

h. NAICS 334: Computer & electronic product mfg 823 159 789 735 -4.1%

i. NAICS 335: Electrical equipment & component mfg 334 076 329 081 -1.5%

j. NAICS 336: Transportation equipment mfg 1 384 293 1 416 901 2.4%

k. NAICS 339: Miscellaneous mfg 534 399 524 341 -1.9%

l. NAICS 311: Food mfg 1 373 864 1 374 345 0.0%

M. Other: apparel, wood product, and printing mfg 1 949 117 1 912 415 -1.9%

N. TOTAL MANUFACTURING 11 091 721 11 021 476 -0.6%
34

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Table 4-2: Employment by Industry for 2013 and 2014 (Thousands): Current Population Survey

Industry Total Employed 

2014

Total Employed 

2015

Employment 

Change

Percent 

Change

Mining 1 088 917 -171 -15.7%

Construction 9 813 9 935 122 1.2%

Manufacturing 15 100 15 338 238 1.6%

Wholesale and Retail Trade 20 251 20 320 69 0.3%

Transportation and Utilities 7 581 7 726 145 1.9%

Information 3 115 2 988 -127 -4.1%

Financial Activities 9 871 10 087 216 2.2%

Professional and Business Services 17 004 17 409 405 2.4%

Education and Health Services 32 830 33 678 848 2.6%

Leisure and Hospitality 13 489 13 821 332 2.5%

Other Services 7 169 7 264 95 1.3%

Public Administration 6 757 6 928 171 2.5%

Agriculture 2 237 2 422 185 8.3%

TOTAL* 146 305 148 833 2 528 1.7%

* The sum may not match the total due to rounding of annual averages

Source: Current Population Survey, Bureau of Labor Statistics. "Table 17: Employed Persons by 

Industry, Sex, Race, and Occupation." <http://www.bls.gov/cps>

Table 4-3: Manufacturing Employment (Thousands): Current Employment Statistics

2014 2015 Percent Change

Manufacturing 12 185 12 318 1.1%

Durable Goods 7 674 7 756 1.1%

Nondurable Goods 4 512 4 562 1.1%

Source: Bureau of Labor Statistics. Current Employment Statistics.

http://www.bls.gov/ces/home.htm

Between January of 2006 and January of 2010, manufacturing employment declined by 

19.4 %, as seen in Figure 4.1. As of July 2016, employment is still 13.4 % below its 2006 

level. In times of financial difficulty, large purchases are often delayed or determined to 

be unnecessary. Thus, it would be expected that during the recent recession durable 

goods would decline more than nondurable goods. As can be seen in Figure 4.1, durable 

goods declined more than manufacturing as a whole while nondurable goods did not 

decline as much. By January of 2010, durable goods had declined 22.2 % while 

nondurables declined 14.5 %. As of July of 2016, employment in durables was 14.3 % 

below its 2006 levels while that for nondurables was at 11.9 % below 2006 levels.
35

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Source: Bureau of Labor Statistics. Current Employment Statistics. <http://www.bls.gov/ces/>

Figure 4.1: Cumulative Change in Percent in Manufacturing Employment (Seasonally Adjusted), 

2006-2016

The employees that work in manufacturing offer their time and, in some cases, risk their 

safety in return for compensation. In terms of safety, the number of fatal injuries 

increased between 2013 and 2014 (see Table 4-4). Nonfatal injuries increased while the 

injury rate remained the same (see Table 4-5). However, the incident rate for nonfatal 

injuries in manufacturing remains higher than that for all private industry. As seen in 

Figure 4.2, fatalities, injuries, and the injury rate have had an overall downward trend 

since 2000. 

During the recession, the number of hours worked per week declined, as seen in Figure 

4.3. Unlike employment, however, the number of hours worked per week returned to its 

pre-recession levels or slightly higher. Average wages increased significantly during the 

recession and decreased during the following recovery, as can be seen in Figure 4.4. This 

is likely because low wage earners are disproportionately impacted by employment 

reductions, which suggests that high wage earners not only receive more pay, they also 

have more job security. The compound annual growth rate in real wages was 0.5 % 

between 2011 and 2016. From 2015 to 2016, they grew 2 %. As seen in Figure 4.5, 

employee compensation, which includes benefits, has had a 5 year compound annual 

growth of 1 %.

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

20062007200820092010201120122013201420152016

Cumulative Change % (2006 Base)

Nondurable Goods

Durable Goods

Manufacturing
36

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Table 4-4: Fatal Occupational Injuries by Event or Exposure

Total

Violence and 

other injuries 

by persons or 

animals

Transportatio

n Incidents

fires and 

explosion

s

Falls, 

slips, 

trips

exposure to 

harmful substances or 

environment

s 

Contact 

with 

objects 

and 

equipmen

t 

2013

Total 4585 773 1865 149 724 335 721

Manufacturing 312 36 91 12 42 18 110

2014

Total 4821 765 1984 137 818 390 715

Manufacturing 349 41 87 23 49 46 101

Percent 

Change

Total Private 

Industry 5.1% -1.0% 6.4% -8.1% 13.0%

16.4% -0.8%

Manufacturing 11.9% 13.9% -4.4% 91.7% 16.7%

155.6% -8.2%

Source: Bureau of Labor Statistics. Census of Fatal Occupational Injuries. "Industry by Event or Exposure." 

<http://stats.bls.gov/iif/oshcfoi1.htm>

Table 4-5: Total Recordable Cases of Nonfatal Injuries and Illnesses, Private Industry

2013 2014 Percent Change

Manu- facturing

Incident Rate per 100 full time 

workers 4.0 4.0 0.0%

Total Recordable Cases 

(thousands) 476.7 483.3 1.4%

Private 

Industry

Incident Rate per 100 full time 

workers 3.3 3.2 -3.0%

Total Recordable Cases 

(thousands) 3007.3 2953.5 -1.8%

Source: Bureau of Labor Statistics. Injuries, Illness, and Fatalities Program. 2013-

2014. http://www.bls.gov/iif/

Source: Bureau of Labor Statistics. Injuries, Illness, and Fatalities Program. 2013-2014. http://www.bls.gov/iif/

Figure 4.2: Manufacturing Fatalities and Injuries

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

0

200

400

600

800

1000

1200

1400

1600

1800

200020012002200320042005200620072008200920102011201220132014

Nonfatal Injuries per 100 Full-time Workers

Fatalities (count) and Injuries (thousands)

Fatalities

Injuries

Injury Rate
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Source: Bureau of Labor Statistics. Current Employment Statistics. <http://www.bls.gov/ces/home.htm>

Figure 4.3: Average Weekly Hours for All Employees (Seasonally Adjusted)

Source: Bureau of Labor Statistics. Current Employment Statistics. <http://www.bls.gov/ces/home.htm>

Figure 4.4: Average Hourly Wages for Manufacturing and Private Industry (Seasonally Adjusted)

32.0

34.0

36.0

38.0

40.0

42.0

20062007200820092010201120122013201420152016

Hours per Week

Private

Manufacturing

Durable Goods

Nondurable Goods

22.00

23.00

24.00

25.00

26.00

27.00

28.00

2006200720082009201020112012201320142015

$2016 per Hour 

Private

Manufacturing

Durable Goods

Nondurable Goods
38

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Source: Bureau of Labor Statistics. National Compensation Survey. <http://www.bls.gov/ncs/>

Figure 4.5: Manufacturing Employee Compensation (Hourly)

34.00

34.50

35.00

35.50

36.00

36.50

37.00

37.50

38.00

38.50

39.00

39.50

20062007200820092010201120122013201420152016

Employee Compensation ($2016)
39

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5 Innovation and Competitiveness

Manufacturing goods involves not only physical production, but also design and 

innovation. Measuring and comparing innovation between countries is problematic, 

however, as there is not a standard metric for measuring this activity. Four measures are 

often discussed in regards to innovation: number of patent applications, research and 

development expenditures, number of researchers, and number of published journal 

articles. As seen in Table 5-1, the US ranked 3rd in 2014 in patent applications per million 

people, which puts it above the 90th percentile. Using patent application as a metric can 

be problematic though, as not all innovations are patented. The US ranked 10th in 

research and development expenditures as a percent of GDP in 2012, which puts it at the 

90th percentile. In terms of researchers per million people, the US ranked 20th, putting it 

at the 75th percentile. In journal articles per million people it ranked 21st, putting it at the 

91st percentile.29

In addition to some of the previously mentioned metrics, a number of indices have been 

developed to assess national competitiveness. The IMD World Competitiveness Index 

provides additional insight into the US innovation landscape. Figure 5.1 provides the US 

ranking for 20 measures of competitiveness. This provides some indicators to identify

opportunities for improvement in US economic activity. The US ranks low in public 

finance, prices, and fiscal policy. Overall, the US is ranked 3rd in competitiveness for 

conducting business.30 The Competitive Industrial Performance Index, published by the 

United Nations Industrial Development Organization, ranks the US 3rd out of 147 

countries in its economic performance in 2014. This index assesses an economy’s ability 

to competitively produce and export manufactured goods.31

Table 5-1: Patent Applications per Million People

Country Name 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Korea, Rep. 2538 2594 2648 2597 2589 2668 2773 2962 3186 3254

Japan 2880 2715 2605 2578 2306 2265 2250 2250 2134 2092

United States 703 743 801 762 733 782 795 856 910 894

Germany 586 583 582 600 584 575 574 580 577 595

China 72 93 116 147 172 219 309 396 519 587

New Zealand 458 515 448 295 361 364 342 323 363 363

Finland 349 345 341 339 338 323 306 314 293 260

Austria 276 275 288 276 271 290 257 268 255 245

Denmark 306 276 304 297 275 293 283 251 239 244

Singapore 133 142 152 164 150 176 204 203 212 238

United States Rank 5 4 3 4 3 3 3 3 3 3

United States Percentile 96 97 98 97 97 98 98 98 98 98

 

29 World Bank. World Development Indicators. <http://data.worldbank.org/data-catalog/worlddevelopment-indicators>

30 IMD. IMD World Competiveness Country Profile: US. 

<https://worldcompetitiveness.imd.org/countryprofile/US>

31 United Nations Industrial Development Organization. Competitive Industrial Performance Report 2014. 

Working Paper 12/2014. 

<http://www.unido.org/fileadmin/user_media/Services/PSD/WP2014_12_CIPReport2014.pdf>
40

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Table 5-2: Research and Development Expenditures as a Percent of GDP

Country Name 2005 2006 2007 2008 2009 2010 2011 2012

Israel 4.09 4.19 4.48 4.39 4.15 3.96 4.10 4.25

Korea, Rep. 2.63 2.83 3.00 3.12 3.29 3.47 3.74 4.03

Finland 3.33 3.34 3.35 3.55 3.75 3.73 3.64 3.42

Japan 3.31 3.41 3.46 3.47 3.36 3.25 3.38 3.34

Sweden 3.39 3.50 3.26 3.50 3.42 3.22 3.22 3.28

Denmark 2.39 2.40 2.51 2.78 3.07 2.94 2.97 3.02

Switzerland - - - 2.73 - - - 2.96

Germany 2.43 2.46 2.45 2.60 2.73 2.72 2.80 2.88

Austria 2.38 2.37 2.43 2.59 2.61 2.74 2.68 2.81

United States 2.51 2.55 2.63 2.77 2.82 2.74 2.77 2.81

United States Rank 7 7 6 7 7 8 8 10

United States Percentile 94 93 95 94 94 93 93 90

The 2016 Deloitte Global Manufacturing Competitiveness Index uses a survey of CEOs 

to rank countries based on managerial perception. The US was ranked 2nd out 40 nations 

with China being ranked 1st. High-cost labor, high corporate tax rates, and increasing 

investments outside of the US were identified as challenges to the US industry. 

Manufacturers indicated that companies were building high-tech factories in the US due 

to rising labor costs in China, shipping costs, and low cost shale gas.32 Additionally, an 

increase in manufacturing construction can be seen in the Construction Put in Place 

estimates from the Census Bureau. Between March of 2014 and March of 2015, 

manufacturing construction increased 53 %; however, this trend may have reached a 

Table 5-3: Researchers per Million People

Country Name 2005 2006 2007 2008 2009 2010 2011 2012

Israel - - - - - - 7 296 8 282

Finland 7 545 7 673 7 373 7 692 7 649 7 717 7 414 7 460

Denmark 5 201 5 302 5 519 6 497 6 660 6 744 7 026 7 311

Singapore 5 292 5 425 5 769 5 741 6 149 6 307 6 496 6 442

Korea, Rep. 3 777 4 175 4 604 4 868 5 001 5 380 5 853 6 362

Norway 4 584 4 838 5 163 5 360 5 439 5 408 5 496 5 548

Sweden 6 101 6 133 5 005 5 443 5 069 5 256 5 135 5 164

Japan 5 360 5 387 5 378 5 158 5 148 5 153 5 160 5 084

Luxembourg 4 864 4 412 4 636 4 716 4 829 5 190 5 829 4 677

Austria 3 457 3 531 3 816 4 142 4 146 4 359 4 406 4 655

Canada 4 238 4 313 4 588 4 712 4 451 4 649 4 727 4 490

Switzerland - - - 3 288 - - - 4 481

Germany 3 350 3 452 3 597 3 752 3 941 4 078 4 211 4 379

Slovenia 2 631 2 920 3 098 3 463 3 645 3 753 4 261 4 307

Netherlands 2 930 3 241 3 101 3 071 2 833 3 229 3 502 4 247

France 3 307 3 418 3 580 3 654 3 741 3 868 3 940 4 076

North America 3 769 3 834 3 840 3 991 4 109 3 944 4 082 4 066

Portugal 2 016 2 344 2 671 3 820 3 761 3 923 4 173 4 042

United Kingdom 4 129 4 188 4 132 4 084 4 116 4 091 3 979 4 029

United States 3 718 3 782 3 758 3 912 4 072 3 867 4 011 4 019

United States Rank 13 14 14 15 14 17 17 20

United States Percentile 86 83 85 84 85 84 82 75

 

32 Deloitte. 2016 Global Manufacturing Competitiveness Index. 

<http://www2.deloitte.com/content/dam/Deloitte/us/Documents/manufacturing/us-gmci.pdf>
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Table 5-4: Journal Articles per Million People

Country Name 2005 2006 2007 2008 2009 2010 2011 2012 2013

Switzerland 2037 2167 2212 2239 2303 2370 2462 2578 2603

Denmark 1497 1539 1616 1646 1748 1833 2018 2188 2223

Australia 1461 1543 1662 1687 1749 1819 1922 1957 2068

Sweden 1788 1809 1804 1767 1810 1845 1900 1982 2017

Singapore 1818 1814 1747 1750 1764 1894 1909 1996 1974

Norway 1411 1489 1591 1613 1784 1805 1906 2001 1940

Finland 1648 1689 1712 1733 1772 1766 1824 1844 1867

Netherlands 1439 1472 1533 1579 1692 1702 1751 1806 1810

Iceland 1163 1144 1155 1337 1535 1731 1692 1957 1779

Slovenia 1155 1192 1317 1472 1561 1571 1766 1726 1706

Canada 1420 1472 1552 1573 1615 1630 1642 1681 1644

New Zealand 1237 1301 1379 1442 1483 1517 1634 1678 1631

United Kingdom 1344 1397 1440 1438 1473 1462 1492 1519 1518

Ireland 1103 1100 1210 1251 1382 1499 1571 1510 1495

Belgium 1198 1216 1271 1320 1373 1371 1408 1477 1476

Austria 1074 1096 1184 1227 1300 1320 1384 1424 1419

Israel 1475 1540 1541 1531 1479 1408 1419 1456 1402

Luxembourg 310 398 446 633 773 890 1104 1085 1348

North America 1250 1266 1281 1288 1299 1321 1346 1356 1338

Czech Republic 756 841 937 999 1056 1179 1253 1293 1334

United States 1231 1244 1251 1257 1265 1287 1313 1320 1304

United States rank 14 14 16 17 20 19 19 19 21

United States Percentile 94 94 93 93 92 92 92 92 91

Figure 5.1: IMD World Competitiveness Rankings for the US

0

20

40

60

Domestic Economy

International Investment

Scientific Infrastructure

Finance

Technological Infrastructure

Productivity and Efficiency

Basic Infrastructure

Employment

International Trade

Business Legislation

Management Practices

Health and Environment

Attitudes and Values

Institutional Framework

Education

Labor Market

Societal Framework

Fiscal Policy

Prices

Public Finance
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plateau, as July 2016 is down 6 % from July of the previous year.33 According to the 

Deloitte Global Manufacturing Competitiveness Index, advantages to US manufacturers 

included its technological prowess and size, productivity, and research support. China 

was ranked 1st with advantages in raw material supply, advanced electronics, and 

increased research and development spending. China has challenges in innovation, 

slowing economic growth, productivity, and regulatory inefficiency.

The World Economic Forum’s 2015-2016 Global Competitiveness Report uses 12 items 

to assess the competitiveness of 140 economies, which includes the set of “institutions, 

policies and factors that determine the level of productivity of an economy, which in turn 

sets the level of prosperity that the country can achieve.” As seen in Figure 5.2, the US 

was ranked 3rd with low rankings in macroeconomic environment, health and primary 

education, and institutions.34 The index uses a set of 115 factors to produce the 12 items 

in Figure 5.2 (see Table 5-5). Among the lowest ranking factors are the costs of terrorism, 

education enrollment, and crime. Business executives were asked to identify and rank the 

top 5 most problematic factors for doing business from a list of 16 factors. US education 

is among the top 5. 

Figure 5.2: World Economic Forum 2015-2016 Global Competitiveness Index: US Rankings

 

33 Census Bureau. Construction Spending. Construction put in place.

<https://www.census.gov/construction/c30/c30index.html>

34 World Economic Forum. The Global Competitiveness Report 2015-2016. 

<http://www3.weforum.org/docs/gcr/2015-2016/Global_Competitiveness_Report_2015-2016.pdf>

0

20

40

60

80

100

120

140

Overall Rank

Market Size

Labor Market Efficiency

Business Sophistication

Innovation

Financial Market

Development

Higher Education and

Training Infrastructure

Goods Market Efficiency

Technilogical Readiness

Insitutions

Health and Primary

Education

Macroeconomic Environment
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Table 5-5: US Rank for Indicators used in the World Economic Forum Competitiveness Index

Indicator Rank Indicator Rank

Imports as a percentage of GDP 136 Mobile-broadband subscriptions/100 pop. 17

Exports as a percentage of GDP 136 Quality of electricity supply 16

General government debt, % GDP 129 Nature of competitive advantage 16

Business costs of terrorism 114 Intellectual property protection 15

Government budget balance, % GDP 114 Efficacy of corporate boards 15

Mobile telephone subscriptions/100 pop. 99 Quality of railroad infrastructure 15

Total tax rate, % profits 95 Degree of customer orientation 15

HIV prevalence, % adult pop. 92 Quality of roads 14

Primary education enrollment, net % 91 Extent of staff training 14

Gross national savings, % GDP 87 Buyer sophistication 14

Business costs of crime and violence 77 Ease of access to loans 14

Wastefulness of government spending 75 Quality of overall infrastructure 13

Business impact of HIV/AIDS 75 Individuals using Internet, % 13

Organized crime 62 Availability of specialized training services 11

Secondary education enrollment, gross % 61 Extent of market dominance 11

No. procedures to start a business 57 Gov’t procurement of advanced tech products 11

Business impact of rules on FDI 53 PCT patents, applications/million pop. 11

Prevalence of non-tariff barriers 52 Quality of port infrastructure 10

Women in labor force, ratio to men 52 Effectiveness of anti-monopoly policy 10

Burden of government regulation 51 Hiring and firing practices 10

Business impact of tuberculosis 51 Affordability of financial services 10

Public trust in politicians 44 Local supplier quality 10

Favoritism in decisions of government officials 44 Quality of management schools 9

Quality of math and science education 44 Reliance on professional management 9

Infant mortality, deaths/1,000 live births 42 Willingness to delegate authority 9

Int’l Internet bandwidth, kb/s per user 41 Pay and productivity 8

Prevalence of foreign ownership 40 Local supplier quantity 7

Soundness of banks 39 Value chain breadth 7

Effect of taxation on incentives to invest 35 Production process sophistication 7

Effect of taxation on incentives to work 35 Country capacity to attract talent 6

Life expectancy, years 34 Control of international distribution 6

FDI and technology transfer 34 Quality of air transport infrastructure 5

Trade tariffs, % duty 33 Country credit rating, 0–100 (best) 5

Irregular payments and bribes 32 Financing through local equity market 5

Cooperation in labor-employer relations 31 Venture capital availability 5

Burden of customs procedures 30 Intensity of local competition 4

Quality of primary education 29 Availability of financial services 4

Diversion of public funds 28 Legal rights index, 0–12 (best) 4

Judicial independence 28 Quality of scientific research institutions 4

Ethical behavior of firms 27 Availability of scientists and engineers 4

No. days to start a business 27 Tertiary education enrollment, gross % 3

Efficiency of legal framework in settling disputes 25 Firm-level technology absorption 3

Strength of investor protection, 0–10 (best) 25 Company spending on R&D 3

Agricultural policy costs 25 Tuberculosis cases/100,000 pop. 2

Regulation of securities exchanges 24 Country capacity to retain talent 2

Strength of auditing and reporting standards 23 Availability of latest technologies 2

Property rights 22 Foreign market size index, 1–7 (best) 2

Transparency of government policymaking 22 GDP (PPP$ billions) 2

Reliability of police services 22 State of cluster development 2

Fixed-telephone lines/100 pop. 20 Capacity for innovation 2

Efficiency of legal framework in challenging regs. 19 University-industry collaboration in R&D 2

Flexibility of wage determination 19 Available airline seat km/week, millions 1

Quality of the education system 18 Inflation, annual % change 1

Protection of minority shareholders’ interests 17 Redundancy costs, weeks of salary 1

Internet access in schools 17 Domestic market size index, 1–7 (best) 1

Extent of marketing 1
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Table 5-6: Problematic Factors for Doing Business (16 total possible factors ranked)

Factor Score

Tax rates 14.0

Inefficient government bureaucracy 13.7

Complexity of tax regulations 12.5

Restrictive labor regulations 9.7

Inadequately educated workforce 8.6

Poor work ethic in labor force 7.0

Access to financing 6.7

Insufficient capacity to innovate 5.5

Inadequate supply of infrastructure 5.3

Policy instability 5.2

Inflation 3.5

Foreign currency regulations 3.3

Poor public health 1.6

Government instability/coups 1.2

Crime and theft 1.1

Corruption 1.0
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6 Discussion

This report provides an overview of the US manufacturing industry. There are three 

aspects of U.S. manufacturing that are considered: (1) how the US industry compares to 

other countries, (2) the trends in the domestic industry, and (3) the industry trends 

compared to those in other countries. According to the 2014 Annual Survey of 

Manufactures (ASM), the US manufacturing sector produced $2.4 trillion in value added 

in 2014, up 1.9 %. Value added in machinery manufacturing (NAICS 333), computer and 

electronic product manufacturing (NAICS 334), electrical equipment (NAICS 335), and 

transportation equipment (NAICS 336) grew 5.1 %, -0.7 %, 2.8 %, and 7.8 % 

respectively. US compound real (controlling for inflation) annual growth between 1989 

and 2014 was 2.2 %, which places the US in the 47th percentile of all countries. This 

growth exceeded that of Germany, France, Canada, Japan, and Australia; however, it is 

slower than the global average (3 %) and that of many emerging economies. US 

manufacturing value added, as measured in constant 2005 dollars, is the second largest 

just behind that of China. In current dollars, the US produced $1.8 trillion in 

manufacturing valued added while China produced $1.9 trillion. Among the ten largest 

manufacturing countries, the US is the 3rd largest manufacturing value added per capita.

The US remains a major manufacturing nation; however, other countries are rising 

rapidly. US manufacturing was significantly impacted by the previous recession and, as 

of 2016, has not returned to pre-recession levels of production or employment. The US 

has advantages in technological prowess, innovation, productivity, and research and 

development; however, education was ranked low in two indices (i.e., IMD and World 

Economic Forum), which could negatively impact US advantages in the future. 

Institutions and institutional framework, which include crime, regulatory frameworks, 

country credit rating, and government spending among other things, ranked low in two 

indices. A number of costs were identified as challenges to US manufacturing, including 

high labor costs, which is likely related to high productivity. Systematic cost analysis of 

US manufacturing reveals that management is a significant cost along with a number of 

other non-production costs such as wholesale trade. The number of injuries and the injury 

rate in US manufacturing has a general downward trend.
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