It is obtained by devising the value added in manufacturing by the total gross value-added to GDP at basic or producers' prices. The relative size of manufacturing is a significant indicator of the state of the economy. It also hints at basic driving forces associated with sustainable development. As a key economic activity, manufacturing production has been used as a growth determinant, reflecting the stage of country development in terms of availability of human resources and capital, both essential requirements in the drive towards sustainable development.
Manufacturing depends largely on the development of skills and equipment.
Manufacturing activities also draw from a wide range of resources and raw materials and, like them, may deplete and degrade natural assets, for example, air, water, trees. The development of manufacturing sector is seen as a key indicator of sustainable development progress by many developing countries. This indicator is closely related to other economic and environmental indicators reflecting the level of development and use of natural resources, such as share of natural resource intensive industries in manufacturing, depletion of mineral resources, and share of manufacturing in exports. In developing countries it may also be linked to indicators reflecting international cooperation and per capita income. It is derived as a percentage of the sum of total value added of all production units including all taxes and subsidies on products which are not included in the valuation of output.