US Manufacturing Plant Construction
Posted on April 2, 2006 Comments (4)
Breaking Ground by Jeff Moad:
Last year, according to figures from the U.S. Department of Commerce, investment in new manufacturing plant construction increased 25%. That compares to a decline of 6.5% in 2003 and an increase in 2004 of 9.7%
As we have noted earlier, the United States is by far the leading manufacturer in the world: Global Manufacturing Data by Country and Manufacturing and the Economy (Japan is second and China third and growing rapidly).
The mini-revival in new-plant development has been enough to slow what until recently had been a prolonged decline in the number of manufacturing plants operating in the U.S. Between 1997 and 2004, according to the U.S. Department of Labor (DOL), the number of plants operating in the U.S. dropped by 10%. In 2005, however, according to DOL figures, the number of plants stabilized at around 336,000.
Even though the US manufacturing output has continued to increase those gains have come largely from improved efficiency as fewer workers (and fewer plants) are producing the increased output. The decrease in employment is a worldwide phenomonon: Manufacturing Job Losses: USA 2 million, China 15 million.
4 Responses to “US Manufacturing Plant Construction”
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April 2nd, 2006 @ 10:50 am
So are you saying that most of the manufacturing jobs lost in the U.S. are due to increased efficiency, rather than our losing out to China? Productivity in
China is on the increase as well.
China Law
April 2nd, 2006 @ 12:32 pm
Yes that is what I am saying. Given that China has lost more than 7 times as many manufacturing jobs as the US it makes little sense to say the economic force is jobs moving to China, in my opinion. China has lost many more jobs than the US.
Also the China’s share of worldwide manufacturing has come more from the rest of the world than from the US.
The primary worldwide force is increased productivity that is drastically reducing manufacturing employment (everywhere).
There is also some effect as production is moved from one country to another (say the US to China) but that is not the primary cause of decreased manufacturing employment. That can be seen by the fact that the US manufactures more today than ever (if the primary reason for job loss was was the US losing manufacturing to China then manufacturing output in the US should have declined).
Yes there are many examples of manufacturing that was done by a plant in the US 5 years ago and now that manufacturing is done in China. But still after everything the USA is still manufacturing more than anyone else and more than it ever has.
June 29th, 2006 @ 2:55 pm
[...] Yes, as I have been saying the demise of manufacturing in the USA has been exaggerated in the popular press (Global Manufacturing Data by Country – US Manufacturing Plant Construction – Manufacturing and the Economy). Manufacturing jobs have decreased dramatically, both in the USA and the entire world. This decrease of manufacturing jobs worldwide is the most significant change. The manufacturing jobs moving from one country to another is also true but is reported much more than is justified in comparison to the overall decrease in jobs. Gordon Hunter, Littelfuse’s chief executive, is confident that America can maintain its edge in manufacturing. He is an engineer from the north of England who spent much of his earlier career working for Intel, a semiconductor firm, in California. American firms will keep on improving their productivity, he says, because of a business environment that embraces innovation. “Being flexible and willing to learn are skills that America still excels at,” he says. Eventually, perhaps even GM will get the hang of it. [...]
November 11th, 2008 @ 2:13 pm
I agree completely. The mainstream press is either lazy, biased, or both, and reports manufacturing job loses in simplistic and usually alarming language. The service sector has been growing for a long time as the manufacturing sector shrinks in number of workers, but not in actual production. But I guess it is easier to try to scare people by saying their jobs are going to China.