No Such Thing as US Manufacturing Renaissance

No Such Thing as US Manufacturing Renaissance

Jan. 13, 2015
By the end of 2013 there were 15,000 fewer manufacturing establishments in the United States than in 2007.

Although there have been a number of cases where large companies, such as GE and Apple, have moved production back to the US., Adams Nager of The Information Technology and Innovation Foundation, says that there is in fact no renaissance.

By the end of 2013 there were 15,000 fewer manufacturing establishments in the United States than in 2007.

Nager points out the entire sector is not doing as well as most people believe.

Moreover, inflation-adjusted value added in U.S. manufacturing remains 3.2% below 2007 levels, although overall GDP is up 5.6%. And a closer look suggests that this decline is even worse. Real value added of non-durable goods is 11.5% below 2007 levels, and this includes the chemical and petroleum refining industries which supposedly are thriving because of the natural gas boom.

Overall, manufacturing without computers and electrical components (NAICS 334) is down 7.7% (this is a more accurate assessment because virtually all of the measured output gains in NAICS 334 are due to measurement issues resulting from Moore’s Law, computers getting faster, rather than from an increase in actual output).

What worries him is that this false perception is adversely affecting public policy.

The bottom line is that putting our faith in current circumstances for a revival of U.S. manufacturing is a highly risky strategy. U.S. manufacturing will not fix itself, and believing that it will do so allows Washington to continue to ignore what it can do to help.

For the full article "The False Narrative of the US Manufacturing Renaissance."

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