U.S. Department of Commerce

Economics and Statistics Administration

What is Made in America?

Executive Summary

 ccurately determining how much of our economy’s total production is 

 American-made can be a daunting task. However, data from the 

Commerce Department’s U.S. Census Bureau and the Bureau of Economic 

Analysis (BEA) can help shed light on the dollar value of what America produces, 

and what percentage of the dollar value of an industry’s output that is 

considered domestic. Gross output, value added, domestically-sourced inputs, 

and domestic content are all concepts that can be used to measure U.S. 

production and to estimate how much of that production is made in the United 

States. This report starts with the concept of gross output and then looks 

further, seeking to answer the question: “What is Made in America?”

Our analysis reveals that in 2012: 

 U.S. manufacturers sold $5.6 trillion of goods, $4.4 trillion (79 percent) 

of which was “Made in the U.S.A.” Value added directly by the 

manufacturing sector accounted for $1.9 trillion, while value added 

indirectly from all industries (including manufacturing) accounted for

the remaining $2.5 trillion.

 In many cases, the portion of domestic content in U.S. production 

differs markedly from the domestic content on store shelves. For 

example, although the United States imported most of the apparel that 

consumers purchased, the apparel that was made in the United States 

contained 87 percent domestic content.

 Domestic content accounted for 51 cents of every dollar that U.S. 

consumers and businesses spent on manufactured goods. By industry, it 

ranged from a high of 79 cents per dollar of food, beverages, and 

tobacco products to a low of 7 cents per dollar of apparel.

 The four industries with the largest dollar values of American content 

were food, beverage, and tobacco products; chemicals; petroleum and 

coal products; and motor vehicles and parts.

By 

Jessica R. Nicholson 

and 

Ryan Noonan

ESA Issue Brief

# 04-14

October 3, 2014

A
Page 2 U. S. Department of Commerce, Economics and Statistics Administration 

 The petroleum and coal products industry, which is predominantly petroleum refining, was the only 

manufacturing industry whose gross output was less than 70 percent domestic content.

Although manufacturing employment has been growing, jobs in manufacturing are affected by, among 

other things, increased automation, productivity gains, exchange rate fluctuations, trade agreements,

and import prices that affect how manufacturers build their supply chains. For more information on 

employment in the manufacturing sector, see our June 2014 report, “Manufacturing Since the Great 

Recession”.1

 

1

Jessica R. Nicholson and Ryan Noonan. “Manufacturing Since the Great Recession.” Economics and Statistics Administration. 

Available at: http://esa.doc.gov/sites/default/files/reports/documents/manufacturingsincethegreatrecession2014-06-

10final.pdf. 
U. S. Department of Commerce, Economics and Statistics Administration Page 3

Introduction

“Made in the U.S.A.” is a badge of honor, often 

indicating good craftsmanship and evoking a 

sense of patriotism. America’s health and labor 

standards, innovation, and consumer 

protections ensure that U.S. manufacturers 

adhere to proper working conditions and use 

safe, high-quality materials.2Increased demand 

for American-made goods also means more—

and better—jobs. 

In 2010, China overtook the United States as 

the world’s largest manufacturer.3But the 

United States remains a major manufacturing 

power—home to less than five percent of the 

world’s population but generating more than 

one-sixth of global manufacturing activity.4It 

can be hard to believe because it seems like 

most of the products sold in this country were 

made somewhere else. So, what does it mean 

to be made in America? 

 

2

For more information on the benefits of manufacturing in 

the United States, see the Department of Commerce’s 

National Institute of Standards and Technology Make it in 

America campaign website at: 

http://www.nist.gov/mep/america.cfm and the SelectUSA 

website at: http://selectusa.commerce.gov/. 

3

See, for instance, Mecksroth, Daniel J. “China Has a 

Dominant Share of World Manufacturing”. Available at: 

https://www.mapi.net/china-has-dominant-share-worldmanufacturing.

4

For more information on manufacturing in America, see 

the National Institute of Standards and Technology’s 

Hollings Manufacturing Extension Partnership infographic 

“What Manufacturing Really Looks Like: Celebrating 

Manufacturing Day” available at: 

http://nist.gov/mep/mfgday-infographic.cfm.

The “Made in the U.S.A. Label

The “Made in the U.S.A.” label is what most 

people think of when considering what is 

manufactured in the United States. The Federal 

Trade Commission (FTC) has oversight 

responsibilities for the label and requires that 

“all or virtually all” of a product, including all 

significant parts and processing that go into the 

product, must be of U.S. origin.5Complying with 

this standard can be more difficult than it would 

seem because of the global economy and the 

ever-growing web of international supply 

chains. It can also be difficult because the 

definition is vague and there is no quantitative 

procedure that allows manufacturers to 

determine whether “virtually all” of a product’s 

content is domestic. 

For example, a car manufacturer located in the 

U.S. might not make all the parts of a car; 

rather, they may purchase parts (engines, seats, 

tires) that are finished goods made by other 

manufacturers and then use them as 

intermediate inputs to assemble automobiles. 

These intermediate inputs can be either 

imported from abroad or purchased 

domestically. However, even when a 

manufacturer buys inputs from a domestic 

producer, they cannot assume that the input 

was made entirely in America just because it 

was purchased here. 

Quantitative Measures of 

Made in America

Given the difficulty of determining whether a 

single product is made in America, it is easy to 

see the challenge in accurately describing how 

much of our economy’s total production is 

American-made. However, data from the 

 

5

See Federal Trade Commission, Made in the USA. 

Available at: http://www.business.ftc.gov/advertising-andmarketing/made-usa.
Page 4 U. S. Department of Commerce, Economics and Statistics Administration

Census Bureau and BEA can help shed light on 

the dollar value of what America produces, as 

well as the percentage of an industry’s output 

that is considered domestic. Gross output, value 

added, domestically-sourced inputs, and 

domestic content are all concepts that can be 

used to measure U.S. production and to 

estimate how much of that production is made

in the United States.

There are several caveats to keep in mind.

1. All of these measures exclude final goods 

that are imported for domestic 

consumption, such as a T-shirt fully made in 

Vietnam.6The primary goal of this report is 

to estimate what share of U.S. 

manufacturing output was actually created 

in the United States. 

2. Although manufacturing employment has 

been growing for the past four years, U.S. 

manufacturers’ high levels of gross output 

and domestic content do not support as 

many U.S. jobs as in decades past. Through 

much of the past decade, in fact, U.S. 

manufacturing employment decreased even 

while gross output increased. Jobs in 

manufacturing are affected by, among 

other things, increased automation, 

productivity gains, exchange rate 

fluctuations, trade agreements and import 

prices that affect how manufacturers build 

their supply chains.

3. Measured domestic content will be 

sensitive to exchange rate fluctuations. To 

the extent that a nation’s currency is over-

 

6

Value added and the domestic content measures account 

for imports of goods used as inputs by domestic firms in 

the production of final goods. The domestic sourcing 

measure accounts for inputs that are directly imported, 

but does not account for the value of imports embedded 

in intermediate inputs purchased in the United States. 

Gross output does not subtract out imports.

valued, this will inflate the measured 

content of that nation. 

For more information on employment in the 

manufacturing sector, see our June 2014 report, 

“Manufacturing Since the Great Recession”.7

Gross Output

We start by looking at the gross output of U.S. 

manufacturers.8 Gross output is a measure of 

the total value of output of all firms. It is equal 

to the revenue producers receive when they sell 

their products. Some of those goods may be 

sold directly to consumers and others are used 

by firms in the production of other goods or 

exported for purchase abroad.9 In 2012, gross 

output of the U.S. manufacturing sector was

$5.6 trillion; food, beverages, and tobacco 

products accounted for 16 percent of total 

gross output in the sector, followed by 

petroleum and coal products (14 percent), and 

chemicals (13 percent) (See Figure 1).10

 

7

Jessica R. Nicholson and Ryan Noonan. “Manufacturing 

Since the Great Recession.” Economics and Statistics 

Administration. Available at: 

http://esa.doc.gov/sites/default/files/reports/documents/

manufacturingsincethegreatrecession2014-06-10final.pdf. 

8

BEA publishes data on gross output (used in this report), 

while the Census Bureau publishes data on the total value 

of shipments in the Annual Survey of Manufactures (ASM) 

and the Economic Census. Gross output is principally a 

measure of an industry’s sales or receipts. For 

manufacturing it is measured as the value of shipments 

plus the change in finished goods and works-in-process 

inventory. It is a broader measure of output than 

shipments. In 2012, gross output (after redefinitions) in 

the manufacturing sector was $5.6 trillion, while the total 

value of shipments (both primary and secondary) was $5.7 

trillion. Estimates for industries within the sector vary 

between these two series as well. 

9

Gross output includes the value of imported inputs.

10 Gross output is measured in dollar value, not units 

produced. High-priced goods, like airplanes or cars, 

contribute a high value to gross output for each unit 

produced. On the other hand, relatively lower-priced 

items, like a box of cereal or a T-shirt, contribute much less 

value per unit produced.
U. S. Department of Commerce, Economics and Statistics Administration Page 5

Value Added

While data on gross output reveals U.S. 

manufacturers’ revenues, it might be a 

misleading indicator of what is actually made in 

America. As noted, gross output includes 

imported inputs, which should be excluded 

when trying to measure the value of what was 

made in America. More importantly, because 

gross output measures the sales price of all 

goods shipped by manufacturers, both as final 

goods and intermediate inputs, there is a good 

deal of double- or even triple-counting. 

To return to a previous example, a car parts 

manufacturer may sell some of its finished 

product (windshield wipers, for example) 

directly to consumers, but the manufacturer 

also sells windshield wipers to other 

manufacturers that in turn install the wipers on 

automobiles for sale to consumers. The value of 

this second category of wipers would be 

counted once when the car parts manufacturer 

sold them to the auto manufacturer and again 

as part of the value of the total automobile. We 

can even take it a step further if we think about 

the inputs used to make the wipers—like 

rubber—which were purchased by the parts 

manufacturer. At the end of the chain, when 

gross output is calculated, the value of the 

rubber has now been counted three (or more) 

times.

By contrast, data on value added considers only 

the new production completed at each stage of 

the manufacturing process—i.e., the labor and 

capital applied by each firm to the purchased 
Page 6 U. S. Department of Commerce, Economics and Statistics Administration

inputs produced elsewhere (see Figure 2).11

Measuring value added thus eliminates doublecounting.12 The sum of value added across 

manufacturing is equal to the sector’s 

contribution to overall U.S. gross domestic 

product. On average, for the manufacturing 

sector as a whole, value added is equal to about 

34 percent of gross output, as shown in Figure 

2.

Continuing with the automobile example, car 

parts are a finished good and their value is 

included in the value added calculation for the 

transportation equipment industry. However, if 

some of those car parts are used in the 

 

11 BEA defines value added as a measure of output after 

accounting for the intermediate inputs used in production. 

The main components of value added include the returns 

to labor (compensation of employees), returns to capital 

(as measured by gross operating surplus), and returns to 

government (as measured by taxes on production and 

imports less subsidies).

12 As with output, both BEA and the Census Bureau 

(through ASM and the Economic Census) provide 

estimates of value added. Due to different source data as 

well as methodologies, the two estimates differ 

considerably. For the sake of consistency across 

measurements, this report uses BEA data to estimate 

value added. However, because Census data provides a 

more detailed look at sub-industries within the 

manufacturing sector, it may be more useful in other 

cases.

production of automobiles, they are considered 

an intermediate input, and their value will not 

be part of the value added to the economy by 

automobile assembly plants. When an 

automobile is sold, only new inputs used to 

make the car, such as the labor and capital 

required to assemble the car parts into an 

automobile, will be considered as value added 

by auto manufacturers.

Figure 3 below displays U.S. manufacturing 

industries ranked from largest to smallest based 

on the dollar amount of their value added in 

2012. Because of differing contributions of 

labor and capital, as well as variation in the 

amount of intermediate inputs used by 

different industries, the order of industries 

shown in Figure 3 is somewhat different from 

the order shown in Figure 1. In particular, 

industries that produce finished goods that are 

built up from many inputs (such as 

transportation equipment)—or from very highvalue inputs (such as petroleum and coal 

products)—rank lower in value added than they 

do in gross output.

As shown, only 22 percent of the gross output 

in the motor vehicles and parts industry comes 

from value added, while the rest comes from 

domestic and imported intermediate inputs. 
U. S. Department of Commerce, Economics and Statistics Administration Page 7

Near the other end of the spectrum is the 

apparel, leather, and allied products industry, 

where 51 percent of gross output is value 

added. While the dollar value of goods 

produced by the U.S. apparel industry is 

relatively low, much of the industry’s output 

consists of final goods (clothes) ready for 

purchase by consumers.

Domestic Sourcing

Value added provides useful information about 

the contribution of U.S. manufacturing to our 

economy and, by definition, all of value added is 

“made in America.” It does not provide any 

information on the origin of the intermediate 

inputs that went into making a finished good. 

For example, to say that the value added in the 

auto manufacturing industry is $115 billion does 

not tell us how “American” a car is. To what 

extent can cars or any products “assembled in 

America” using imported parts be differentiated 

from products with deeper American origins? 

To answer that question, one must look at the 

overall supply chain and specifically the source 

of intermediate inputs. The inputs that were 

purchased in the United States (not imported) 

can be called “domestically-sourced 

intermediate inputs.” Because value added is 

always domestic, adding together value added 

and domestically-sourced intermediate inputs 

gives us an estimate of the total amount of 

output that is domestically-sourced. Figure 4 

illustrates this concept by showing the 

calculation for the overall manufacturing sector. 

In 2012, 86 percent of gross output in U.S. 

manufacturing was domestically-sourced, of 

which 52 percent was domestically-sourced 

intermediate inputs and 34 percent was value 

added.
Page 8 U. S. Department of Commerce, Economics and Statistics Administration
U. S. Department of Commerce, Economics and Statistics Administration Page 9

While this calculation is relatively 

straightforward, it is not an ideal measure of 

domestic content. As with gross output, the 

value of a good used as an input in the 

production of other goods may be counted 

multiple times (e.g., rubber used to produce 

windshield wipers that are then installed on an 

automobile). It also relies on the assumption 

that inputs purchased from domestic suppliers 

have no foreign content, which is likely untrue. 

However, as an estimate of the overall value of 

what is made in America, the domestic sourcing 

estimate is preferred over gross output, which 

includes imported inputs, and value added, 

which doesn’t account at all for intermediate 

inputs. 

As shown in Figure 5, goods sold by U.S. 

manufacturers are made up primarily of 

materials purchased and labor and capital 

applied here in the United States. In each 

manufacturing industry, excluding petroleum 

and coal products, more than 80 percent of 

total output is comprised of domesticallysourced inputs (including value added and 

intermediate inputs). Because most industries 

have high shares of domestically-sourced inputs 

relative to gross output, the ranking of 

industries is highly consistent with the ranking 

of industries by gross output. The one exception 

is the petroleum and coal products industry: 

many petroleum refineries import their 

intermediate input—crude oil—which leads to a 

relatively lower share of domestically-sourced 

inputs (60 percent).

Domestic Content

As noted above, the domestic sourcing 

estimates rely on the assumption that 

intermediate inputs purchased in the United 

States do not contain any foreign material. 

While this simplifies the calculation of domestic 

content, it is possible—and even likely—that 

domestically-sourced intermediate inputs have 

at least some foreign content that entered 

earlier in the supply chain. A more precise 

measure of what is made in America would not 

include the portion of domestically-sourced 

intermediate inputs that originated overseas. 

To return to the auto parts example, consider 

an automobile manufacturer who purchases 

engines from a domestic car parts supplier. 

While the auto manufacturer purchases 

finished engines from a domestic supplier, the 

pistons used in these engines may have come 

from a foreign source. 

To go from domestic sourcing to true domestic 

content, one must remove the value of foreign 

inputs from intermediate inputs that were 

purchased domestically (see Figure 6).13 This 

complicated calculation removes imports at 

each stage of production sequentially and 

determines the value added by each industry to 

produce final output.14 In 2012, the share of 

domestic content of total output in the 

manufacturing sector was 79 percent, 7 percent 

lower than the share of domestically-sourced 

manufacturing output. The share of domestic 

content includes both the value added directly 

by the manufacturing sector and the value 

added indirectly through intermediate inputs by 

all domestic sectors, including manufacturing.

 

13 These estimates use data from BEA’s input-output 

tables, including the use table, make table, and the import 

matrix. The import matrix assigns values of imported 

commodities by industry. To create this table, BEA makes a 

proportionality assumption and proportionally distributes 

the total value of imports for a commodity across all 

industries that use that commodity because of the limited 

data available to otherwise distribute imports. This 

distribution is done at a very detailed level where many 

commodities are uniquely used by individual industries. 

Additionally, a second assumption in the domestic content 

calculation is that all imported intermediate inputs are 

entirely foreign-made; in other words, these calculations 

do not try to determine the domestic content of imported 

intermediate inputs. Because some imported inputs may 

contain content that was originally created in the United 

States, the share of domestic content presented here 

should be considered a lower bound of the actual share of 

domestic content. 

14 The calculation uses a series of matrix algebra 

calculations with the Bureau of Economic Analysis’ inputoutput tables and import matrix.
Page 10 U. S. Department of Commerce, Economics and Statistics Administration

For example, for domestically-produced motor 

vehicles and parts, the average domestic 

content of a good is 71 percent (see Figure 7). 

The share of output comprised of value added

directly by auto manufacturers is 22 percent 

(the domestic content if all inputs were 

imported), while the average share of 

domestically sourced inputs is 82 percent (the 

domestic content if all intermediate inputs 

purchased in the United States had 100 percent 

U.S. content). 

Once again, the estimates show that U.S. 

manufacturing output has a high share of 

domestic content—80 percent or more for most 

industries. Using this approach, the share of 

domestic content for all industries is lower than 

the share of domestically-sourced inputs, 

suggesting that all industries at this level of 

detail have at least some foreign content in the 

intermediate inputs they purchase here in the 

United States. To see how the estimates of 

domestic content differ from the estimates of 

domestic sourcing, consider the motor vehicle 

and parts industry. While 82 percent of the 

output of the industry comes from labor, 

capital, and inputs sourced in the United States, 

a relatively large portion of the inputs contain 

content that was imported from abroad. As a 

result, the domestic content of this industry is 

71 percent, significantly lower than the simpler 

estimate of sourcing implied above. 

While the domestic content of goods that are 

“Made in the U.S.A.” is high, the domestic 

content of the goods on our store shelves does 

not necessarily appear high. One final way to 

look at the subject is to examine how much of 

U.S. final demand for goods is met by American 

products. Using the same methodology we 

employed to 
U. S. Department of Commerce, Economics and Statistics Administration Page 11

calculate the domestic content of each industry, 

we can find the portion of final demand that 

originated in the United States.15

Looking at it through this lens leads to a 

somewhat different answer. For example, the 

domestic content of computer and electronic 

products manufactured in the U.S. has risen, in 

part because the computers produced in the 

U.S. are highly specialized and in part because 

of a changing product mix. This industry is 

largely dominated by semiconductors and 

navigational equipment. In addition, computers 

and electronics used in national defense 

activities may require domestic content for 

security reasons. Very few mass market 

computers are manufactured in the United 

 

15 For the purposes of this calculation, “final demand” is 

defined as the sum of personal consumption expenditures 

and private fixed investment.

States, so the U.S. value-added share of world 

demand for these more generalized products 

has fallen.

Figure 8 shows the results of this calculation 

and may line up well with our general 

impressions. The contrast between the 

domestic content of American-made goods and 

what we see in stores is especially clear in the 

apparel industry. American-made apparel is, on 

average, 87 percent American; however, only 7 

percent of the apparel that is sold in the U.S. is 

American in origin. Overall, 51 percent of the 

value of goods bought by consumers and 

businesses is “Made in the U.S.A.,” ranging from 

a high of 79 percent for food products to the 

low of 7 percent for apparel. Industries like 

apparel and computers easily feed the 

misperception that “we don’t make anything,” 

while industries like machinery sell most of
Page 12 U. S. Department of Commerce, Economics and Statistics Administration

their products directly to businesses instead of 

consumers. With U.S. factories churning out 

nearly $6 trillion in goods per year, that 

perception is simply not true.

In addition, many of the goods made in America 

end up overseas for purchase by foreign 

consumers, businesses, and governments. 

Overall, 18 percent of the output of U.S. 

manufacturing firms was exported in 2012. As 

we have seen throughout this report, there is a 

great deal of variation across industries. In the 

other transportation equipment industry 

(mainly airplanes and parts), 39 percent of gross 

output went abroad. Another example is the 

computer and electronic products industry, 

where the United States imports most of what 

we consume and also exports a great deal of 

output (36 percent in 2012), reflecting the 

strength of our semiconductor and navigational 

instrument manufacturers. At the other end of 

the spectrum were the printing (3 percent), 

furniture (6 percent), and wood product (6 

percent) industries where only a small share of 

output went abroad in 2012.

Conclusion

As we have seen, there are a number of ways to 

measure what is “Made in the U.S.A.,” all of 

which have some benefits and drawbacks. 

Gross output gives us an idea of what the 

American manufacturing sector produces, but it 

forces us to double-count, or even triple-count, 

any goods that are used multiple times 

throughout the supply chain. Value added 

solves the problem of double-counting, but it 

does not consider intermediate domestic and 

foreign inputs used in the production process.
U. S. Department of Commerce, Economics and Statistics Administration Page 13

This report introduces and measures three 

concepts that avoid the problems above: 

domestic sourcing, domestic content, and 

meeting domestic demand for manufactured 

goods. Although none of these measures is 

perfect (see the caveats at the beginning of the 

report), our methods allow us to simulate the 

movement of American-made goods through 

the supply chain to provide a better estimate of 

the portion of U.S. manufacturing output that 

originated in the U.S.A. The domestic sourcing 

calculation is relatively simple and gets us close 

to the actual value of domestic content for 

most industries, but it simply assumes that all 

inputs purchased from American suppliers were 

made in the U.S.A. The second measure 

introduced here (domestic content)—although 

complex to calculate—provides the best picture 

of what it really means to say “Made in the 

U.S.A.” for a particular industry. Finally, the 

measure of what percent of domestic demand 

is met by US production provides a look from 

the consumer perspective.

Although much of the U.S. demand for 

manufactured goods is met by foreign products, 

it is evident that the U.S. manufacturing sector 

is producing a lot. Furthermore, these goods 

contain a high share of domestic content. For 

more information on “What is Made in 

America?” see the Economics and Statistics 

Administration manufacturing industry profiles 

available at: 

http://www.esa.doc.gov/Reports/what-madeamerica. 
Page 14 U. S. Department of Commerce, Economics and Statistics Administration

Acknowledgements

The authors would like to thank our colleagues from the Economics and Statistics Administration for 

their contributions to this report, especially:

Sue Helper, Chief Economist

Rob Rubinovitz, Deputy Chief Economist

David Langdon, Senior Economist and Policy Advisor

Jane Callen, Editor

Regina Powers, Economist

William Hawk, Economist

Bonnie E. Thibodeau, Apprentice Economist

We would also like to thank our colleagues at the Bureau of Economic Analysis for developing the 

methodology for estimating domestic content and providing clarification on concepts, as needed. We’d 

especially like to thank:

Thomas Howells, Chief, Input-Output Statistics Branch

Gabriel Medeiros, Economist, Input-Output Statistics Branch

We also appreciate helpful comments we have received from the following people, agencies, and 

groups:

Susan Houseman, Upjohn Institute

Michael Mandel, Progressive Policy Institute

National Institute of Standards and Technology (NIST)

NIST Manufacturing Extension Partnership

White House, Council of Economic Advisers

The authors are economists in the Office of the Chief Economist of the U.S. Department of Commerce’s 

Economics and Statistics Administration.

 Technical inquiries:

Office of the Chief Economist

 (202) 482-3523

 Media inquiries:

Office of Communications

 (202) 482-3331

U.S. Department of Commerce

Economics and Statistics Administration

1401 Constitution Ave., NW

Washington, DC 20230

www.esa.doc.gov