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Institute for Workplace Studies-----------------Professor Samuel B. Bacharach

School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies

Cornell University

16 East 34th Street, 4th floor--------------------Stuart Basefsky

New York, NY 10016 -------------------------------Director, IWS News Bureau

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NOTE: Funding for this service ends on 31 March 2015. Postings will end on this date as well.

 

Congressional Research Service (CRS)

 

U.S. Manufacturing in International Perspective

Marc Levinson, Section Research Manager

March 17, 2015

http://www.fas.org/sgp/crs/misc/R42135.pdf

[full-text, 22 pages]

 

Summary

The health of the U.S. manufacturing sector has long been of great concern to Congress. The

decline in manufacturing employment since the start of the 21st century has stimulated particular

congressional interest. The Obama Administration has undertaken a variety of related initiatives,

and Members have introduced hundreds of bills intended to support domestic manufacturing

activity in various ways. The proponents of such measures frequently contend that the United

States is by various measures falling behind other countries in manufacturing, and they argue that

this relative decline can be mitigated or reversed by government policy.

 

This report is designed to inform the debate over the health of U.S. manufacturing through a

series of charts and tables that depict the position of the United States relative to other countries

according to various metrics. Understanding which trends in manufacturing reflect factors that

may be unique to the United States and which are related to broader changes in technology or

consumer preferences may be helpful in formulating policies intended to aid firms or workers

engaged in manufacturing activity. This report does not describe or discuss specific policy

options.

 

The main findings are the following:

 

• China displaced the United States as the largest manufacturing country in 2010,

as the United States’ share of global manufacturing activity declined from 30% in

2002 to 17.4% in 2012.

• Manufacturing output has grown more rapidly in the United States over the past

decade than in most European countries and Japan, although it has lagged China,

Korea, and other countries in Asia.

• Employment in manufacturing has fallen in most major manufacturing countries

over the past two decades. The United States saw a disproportionately large drop

between 2000 and 2010, but its decline in manufacturing employment since 1990

is in line with the changes in several European countries and Japan.

• U.S. manufacturers spend far more on research and development (R&D) than

those in any other country, but manufacturers’ R&D spending is rising more

rapidly in China, Korea, and Taiwan.

• Manufacturers in all major manufacturing countries appear to be spending

increasing amounts on R&D, relative to their value added. U.S. manufacturers

spend approximately 11% of value added on R&D, an increase of approximately

three percentage points since the 2000-2002 period. A very large proportion of

U.S. manufacturers’ R&D takes place in high-technology sectors, particularly

pharmaceutical, electronics, and aircraft manufacturing, whereas in most other

countries a far greater proportion of manufacturers’ R&D outlays occur in

medium-technology sectors such as motor vehicle and machinery manufacturing.

 

Contents

Introduction ...................................................................................................................................... 1

How the U.S. Manufacturing Sector Ranks ..................................................................................... 2

The Role of Services in Manufacturing ........................................................................................... 8

Manufacturing Work ...................................................................................................................... 10

Technology and Research in Manufacturing ................................................................................. 15

 

Figures

Figure 1. Leading Countries, Value Added in Manufacturing ......................................................... 3

Figure 2. Selected Countries’ Shares of Manufacturing Value Added ............................................. 4

Figure 3. Share of Manufacturing in National Economies .............................................................. 5

Figure 4. Change in Value Added in Manufacturing, 2005-2013 .................................................... 6

Figure 5. Domestic Value in Exports of Transport Equipment ........................................................ 7

Figure 6. Domestic Value in Exports of Electrical and Optical Equipment..................................... 7

Figure 7. Investment in Manufacturing Fixed Capital as Share of GDP, 2013 ................................ 8

Figure 8. Service-Sector Inputs into Manufacturing Exports ........................................................ 10

Figure 9. Manufacturing Employment ........................................................................................... 11

Figure 10. Manufacturing Employment ......................................................................................... 11

Figure 11. Real Output per Labor Hour in Manufacturing ............................................................ 12

Figure 12. R&D in Manufacturing, 2013 ...................................................................................... 16

Figure 13. Growth in Manufacturing R&D ................................................................................... 16

Figure 14. Manufacturing R&D as Share of Manufacturing Value Added .................................... 17

 

Tables

Table 1. Hourly Compensation Costs in Manufacturing................................................................ 14

Table 2. Hourly Compensation Costs in Selected Manufacturing Industries ................................ 15

Table 3. Comparative Research and Development Spending by Industry ..................................... 18

Table 4. Manufacturers’ R&D Spending by Sector, 2011 .............................................................. 18

 

Contacts

Author Contact Information........................................................................................................... 19

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