The USA’s share of the manufacturing output of the countries that manufactured over $200 billion in 2007 (the 12 countries on the top of the chart above) in 1990 was 28%, 1995 28%, 2000 33%, 2005 30%, 2006 28%, 2007 27%. China’s share has grown from 4% in 1990, 1995 7%, 2000 11%, 2005 13%, 2006 15%, 2007 16%.
Total manufacturing output in the USA was up 76% in 2007 from the 1990 level. Japan, the second largest manufacturer in 1990, and third today, has increased output 15% (the lowest of the top 12, France is next lowest at 32%) while China is up an amazing 673% (Korea is next at an increase of 271%). Continue reading →
The percent of GDP spent on health care in the USA increased again in 2006 – to 16%. Health care spending reached a total of $2.1 trillion, or $7,026 per person in 2006, up from $6,649 per person in 2005.
The newest data from the UN* confirms most of the recent trends in manufacturing output – most notably that China continues to grow dramatically. The data also shows a stagnation in USA manufacturing output over the last several years, though the USA remains by far the largest manufacturer. The most significant news from this latest data, I believe, is that that manufacturing output growth in the USA has been slower than global manufacturing output growth from 2002-2005. This was not the case prior to 2002. I will be writing more on this data in the Curious Cat Investing and Economics Blog. UN Data, in billions of current US dollars:
I’ve written before about how handwashing by medical care workers is one of the most well-documented preventable causes of death and disease in health care settings.
Self-report data can be worse than useless. They describe an Australian study where 73% of doctors reported washing their hands, but when the docs were observed by a researcher only 9% were seen washing their hands.
The way they finally got compliance up to nearly 100% was to have a group of the hospitals more influential doctors each press their palms on plates that were cultured and photographed, which resulted in images that “were disgusting and and striking, with gobs of colonies of bacteria.”
The article, Manufacturing Lost 3.4 Million Jobs Since 1998 [the broken link was removed], indicates “The increased output should lead to job recovery.” I doubt it. While it is true there is a correlation between output and jobs by far the most significant trend is more manufacturing output and fewer manufacturing jobs everywhere in the world. Like so many articles talking about manufacturing job losses in the USA this one could leave many readers thinking that the USA needs to gain back jobs lost to other countries (while in fact the USA has lost a lower percentage of manufacturing jobs than most all countries – including China – based on the latest data I have seen).
Focusing on manufacturing output and jobs and their importance to the economy makes sense. However, I think people need to update the model they use to set expectations of manufacturing job levels. And given a world in which no countries seem able to do gain manufacturing jobs, it seems more reasonable to expect a continuation of decreased jobs and increased output until that worldwide trend changes. If you want to focus on manufacturing jobs in the USA I think the realistic goals are decreasing the reduction in jobs (by supporting what is still by far the world’s dominant manufacturing economy). Continue reading →
His basic advise is still to buy the broadest market index fund (such as the Vanguard Total Stock Market Index Fund [the broken link was removed]). He also concludes with the advice that those returns have been beaten historically by focusing on stocks with high dividend yields and low price earnings ratios.
To me you can skim though the book pretty quickly. The book is not full of subtle concepts you might miss. Warren Buffet is quoted as saying “Jeremy Siegel’s new fact and ideas should be studied by investors” and his advise is probably is more useful than what I think.
Interesting chart from: The Oil Age Poster [the broken link was removed] . There are all sorts of opinions on the future price of oil.
My view is based in the capitalist/market model – I believe that if it becomes obvious we are running out of oil the price will go up drastically. Those who own it will feel if you don’t buy it today they will sell it to you for much more later. And those that want it don’t have much choice (as the last several spikes in oil prices show – demand does not decline without enormous price increases).
Huge price increases will provide incentives to those in the market to innovate to find alternative ways to make money by providing usable energy sources. If the market, overall, chooses to look forward over a long period of time, then investment in alternatives will begin in earnest early and prices of oil will slowly rise. And as prices rise slowly new alternatives (including ways of reducing consumption) will slowly come into the market. Those alternatives will slowly substitute for oil as a smooth transition is made.
Some figures on Toyota’s economic impact in the USA. Toyota North American vehicle manufacturing totals:
From Toyota’s web site: Toyota Manufacturing in the USA [the broken link was removed]: by 2008, Toyota will have the annual capacity to build 1.81 million cars and trucks, 1.44 million engines, and 600,000 automatic transmissions in North America.
The company’s direct employment in North America is more than 38,000 and direct investment is nearly $16.8 billion with annual purchasing of parts, materials, goods and services from North American suppliers totaling an additional $26 billion.
Toyota Touts Impact on U.S. in Billboards [the broken link was removed] :
The messages highlight numbers, such as 13 — “Donuts in a baker’s dozen; Toyota’s U.S. investment, in billions,” and 386,000 — “Kilometers to the moon; U.S. jobs created by Toyota.” The billboards are in some two dozen U.S. markets where Toyota has factories or supplier operations, from Fremont, Calif., where Toyota partners with GM at an automaking plant, to Huntsville, Ala., where Toyota makes engines.
Brad Setser posts on manufacturing comparisons: Have China’s manufacturing powers been exaggerated? [the broken link was removed]
I am all for pushing against over-generalizations that get repeated so often that they become conventional wisdom. The oft-stated argument that France isn’t growing is one example. In fact, France has grown faster than either Germany or Italy over the past few years, and France grew for the same reason the US grew: soaring real estate prices have pumped up domestic demand.
But I would submit that the real story here is the growth in China’s conventional wisdom to improve our understanding of the real situation. I agree with him that the growth in China’s manufacturing sector is the most important story.
But, to me, that story is so over-reported that many get the wrong impression. The constant mention of the eroding manufacturing sector on the USA I believe leads many to think it is shrinking and small. Yet output continues to increase and the share of worldwide manufacturing output is holding steady. China is gaining substantial ground but the Chinese increase has largely come from Japan and Europe. To me this understanding is important because of my felling about the misperceptions of many. But this is nothing more than my judgement.
Breaking Ground [the broken link was removed] 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%
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.