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Manufacturing in the United States
Manufacturing is a vital economic sector in the United States of America. The United States is the world's second-largest manufacturer after the People's Republic of China with a record high real output in 2024 of $2.913 trillion.
As of December 2024, the U.S. manufacturing industry employed 12.76 million people. Though still a large part of the US economy, in Q1 2025 manufacturing contributed less to GDP than the 'Finance, insurance, real estate, rental, and leasing' sector, the 'Government' sector, or 'Professional and business services' sector.
Manufacturing output recovered from the Great Recession, reaching an all-time high in 2024, but manufacturing employment has been declining since the 1990s, giving rise to what is known as a "jobless recovery," which made job creation or preservation in the manufacturing sector an important topic in the 2016 United States presidential election.
Manufacturing jobs helped build out the U.S. middle class following World War II, as the U.S. established pro-labor policies and faced limited global competition. Between 1980 and 1985, and then again 2001 to 2009, there were precipitous declines in US manufacturing jobs; it is estimated that 1/3 of U.S. manufacturing jobs vanished in the eight years between 2001 and 2009, and few have returned, the worst period for U.S. manufacturing since the Great Depression.
Since 1979, the number of U.S. manufacturing employment has been declining, especially the sharp decline in 2001 and 2007. The way in which employment in the U.S. manufacturing industry has fallen provides a series of potential policy responses including insights into how the industry is changing, and unemployment.
There are several possible explanations for the decline. Bill Lazonick argues that legalization of companies buying their own shares of stock in 1982 has led to sustained stock market bubbles that distorted investment away from physical plant. Others point to automation or developments outside the United States, such as the rise of China, globalized free trade, and supply chain innovation. These have arguably resulted in the off-shoring of thousands of U.S. manufacturing facilities and millions of manufacturing jobs to lower-wage countries. Meanwhile, technological innovation has increased productivity significantly, meaning that manufacturing output in the United States has increased by 80% since the 1980s, despite large job losses in the manufacturing sector during that same period.
The Bureau of Labor Statistics (BLS) forecast in October 2017 that manufacturing employment would fall from 12.3 million in 2016 to 11.6 million in 2026, a decline of 736,000 employees over a decade. As a share of employment, manufacturing was estimated to fall from 7.9% of the total U.S. economy in 2016 to 6.9% of it in 2026, continuing a long-term downward trend.
The U.S. manufacturing industry employed 12.4 million people in March 2017, generating output (nominal GDP) of $2.2 trillion in Q3 2016, with real GDP of $1.9 trillion in 2009 dollars. The share of persons employed in manufacturing relative to total employment has steadily declined since the 1960s. Employment growth in industries such as construction, finance, insurance and real estate, and services industries played a significant role in reducing manufacturing's overall share of U.S. employment. In 1990, services surpassed manufacturing as the largest contributor to overall private industry production, and then the finance, insurance and real estate sector surpassed manufacturing in 1991.
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Manufacturing in the United States
Manufacturing is a vital economic sector in the United States of America. The United States is the world's second-largest manufacturer after the People's Republic of China with a record high real output in 2024 of $2.913 trillion.
As of December 2024, the U.S. manufacturing industry employed 12.76 million people. Though still a large part of the US economy, in Q1 2025 manufacturing contributed less to GDP than the 'Finance, insurance, real estate, rental, and leasing' sector, the 'Government' sector, or 'Professional and business services' sector.
Manufacturing output recovered from the Great Recession, reaching an all-time high in 2024, but manufacturing employment has been declining since the 1990s, giving rise to what is known as a "jobless recovery," which made job creation or preservation in the manufacturing sector an important topic in the 2016 United States presidential election.
Manufacturing jobs helped build out the U.S. middle class following World War II, as the U.S. established pro-labor policies and faced limited global competition. Between 1980 and 1985, and then again 2001 to 2009, there were precipitous declines in US manufacturing jobs; it is estimated that 1/3 of U.S. manufacturing jobs vanished in the eight years between 2001 and 2009, and few have returned, the worst period for U.S. manufacturing since the Great Depression.
Since 1979, the number of U.S. manufacturing employment has been declining, especially the sharp decline in 2001 and 2007. The way in which employment in the U.S. manufacturing industry has fallen provides a series of potential policy responses including insights into how the industry is changing, and unemployment.
There are several possible explanations for the decline. Bill Lazonick argues that legalization of companies buying their own shares of stock in 1982 has led to sustained stock market bubbles that distorted investment away from physical plant. Others point to automation or developments outside the United States, such as the rise of China, globalized free trade, and supply chain innovation. These have arguably resulted in the off-shoring of thousands of U.S. manufacturing facilities and millions of manufacturing jobs to lower-wage countries. Meanwhile, technological innovation has increased productivity significantly, meaning that manufacturing output in the United States has increased by 80% since the 1980s, despite large job losses in the manufacturing sector during that same period.
The Bureau of Labor Statistics (BLS) forecast in October 2017 that manufacturing employment would fall from 12.3 million in 2016 to 11.6 million in 2026, a decline of 736,000 employees over a decade. As a share of employment, manufacturing was estimated to fall from 7.9% of the total U.S. economy in 2016 to 6.9% of it in 2026, continuing a long-term downward trend.
The U.S. manufacturing industry employed 12.4 million people in March 2017, generating output (nominal GDP) of $2.2 trillion in Q3 2016, with real GDP of $1.9 trillion in 2009 dollars. The share of persons employed in manufacturing relative to total employment has steadily declined since the 1960s. Employment growth in industries such as construction, finance, insurance and real estate, and services industries played a significant role in reducing manufacturing's overall share of U.S. employment. In 1990, services surpassed manufacturing as the largest contributor to overall private industry production, and then the finance, insurance and real estate sector surpassed manufacturing in 1991.