page_title: Manufacturing in the United States
section_title: History
hierarchical_section_title: Manufacturing in the United States / Employment / History
caption_attribution_description: English: Panel showing four manufacturing charts
context_page_description: Manufacturing in the United States is a vital sector. The United States is the world's third largest manufacturer with a record high real output in Q1 2018 of $2.00 trillion well above the 2007 peak before the Great Recession of $1.95 trillion. The U.S. manufacturing industry employed 12.35 million people in December 2016 and 12.56 million in December 2017, an increase of 207,000 or 1.7%. Though still a large part of the US economy, in Q1 2018 manufacturing contributed less to GDP than the 'Finance, insurance, real estate, rental, and leasing' sector, the 'Government' sector, or 'Professional and business services' sector.
  Though manufacturing output robustly recovered from the Great Recession to reach an all-time high in 2018, manufacturing employment has been declining since the 1990s. This 'jobless recovery' made job creation or preservation in the manufacturing sector an important topic in the 2016 United States presidential election.
context_section_description: Between 1980 and 1985, US manufacturing was hard hit by a twin dynamic: first, Japanese productivity rose at a rapid rate, so that Japanese products fell in price by 12%. Second, Fed Chair Paul Volcker raised US interest rates such that the US dollar appreciated. This was the opposite policy from that which a rise in Japanese productivity would have dicated, and the US policy action made Japanese products 30% cheaper than American until 1986. The US machine tool sector never recovered from this body blow. Between 1983 and 2005, U.S. exports grew by 340 percent, with exports of manufactured goods increasing by 407 percent over the same period. In 1983, the primary export commodities were transportation equipment, computer and electronic products, agricultural products, machinery (except electrical), chemicals, and food and kindred products. Together these commodities totaled 69 percent of total U.S. exports. In 2005, the primary export commodities were largely the same: computer and electronic products, transportation equipment, chemicals, machinery (except electrical), miscellaneous manufactured commodities, and agricultural products. Together these commodities accounted for 69 percent of total U.S. merchandise exports.
  Between 1983 and 2005, exports of computer and electronic products grew by 493 percent, overtaking transportation as the leading export commodity (which grew by 410 percent). Though agricultural products exports grew by 26 percent during this period, its share of overall merchandise exports fell from 12 percent in 1983 to 4 percent in 2005.
  In 1983, the top trading partners for U.S. exports were Canada (21 percent of total merchandise exports), Japan (11 percent), United Kingdom (5 percent), Mexico (4 percent), Germany (4 percent), the Netherlands (4 percent), Saudi Arabia (3 percent), France (3 percent), Korea (3 percent), and Belgium and Luxembourg (2 percent).
  In 2005, the top markets for U.S. exports were Canada (24 percent), Mexico (13 percent), Japan (6 percent), China (5 percent), United Kingdom (4 percent), Germany (4 percent), South Korea (3 percent), the Netherlands (3 percent), France (2 percent), and Taiwan (2 percent). Between 1983 and 2005, exports to Mexico increased by 1,228 percent, allowing it to replace Japan as the second-largest market for U.S. exports.
  In the first quarter of 2010, overall U.S. merchandise exports increased by 20 percent compared to the first quarter of 2009, with manufactured goods exports increasing by 20 percent. As in 2009, the highest export commodities were transportation equipment, computer and electronic products, chemicals, machinery (except electrical), agricultural products, and miscellaneous manufactured commodities.
  In the first quarter of 2010, the primary markets for U.S. merchandise exports were Canada, Mexico, China, Japan, the United Kingdom, Germany, South Korea, Brazil, the Netherlands, and Singapore. With the exception of the Netherlands, exports to all of these countries increased in the first quarter of 2010, compared to the same quarter in 2009. Notably, exports to Canada increased by 22 percent, Mexico by 28 percent, and China by 47 percent over this period. Exports to the two NAFTA partners accounted for nearly one-third (32 percent) of U.S. merchandise trade in the first quarter of 2010.
  The panel chart in this section includes four diagrams describing manufacturing labor, output, and productivity historical trends through 2016:
  Figure 1-Job measures: The blue line (left axis) is the ratio of manufacturing jobs to the total number of non-farm payroll jobs. It has declined since the 1960s as manufacturing jobs fell and services expanded. The red line (right axis) is the number of manufacturing jobs (000s), which had fallen by nearly one-third since the late 1990s.
  Figure 2-Output measures: Real (inflation adjusted) GDP (blue line) and nominal GDP (red line) from the manufacturing sector. While both rose from the trough due to the Great Recession, the real GDP had yet to regain its pre-crisis (2007) level as of 2016.
  Figure 3-Job measures, in
caption: Panel showing four manufacturing charts, illustrating trends in employment, output, and productivity
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