U.S. Not Yet A Post- Manufacturing Society
September 26, 2000
Much has been written about the fact that the U.S. is in transition from a manufacturing economy to a service and information society. But experts warn against writing off the importance of manufacturing.
- Analysts report that manufacturing output is higher than at any other time in the nation's history and manufacturing jobs are just about as numerous as ever.
- Manufacturing's decline appears real if one looks at each year's current prices for the manufacturing sector as a part of gross domestic product -- which indicates it has dropped from 18.7 percent of GDP in 1987 to 16.4 percent in 1998.
- But if one relies on constant, inflation-adjusted dollars, manufacturing's share of GDP has only dropped from 17.4 percent in 1987 to 17.1 percent in 1998 -- and, although comparisons aren't available for earlier years, some economists believe that manufacturing's share has declined little, if at all, since the late 1940s.
- From 1992 to 1999, in a period when the economy as a whole grew by 29 percent, the Federal Reserve's index of manufacturing output climbed 42 percent.
What really counts is that U.S. manufacturing, which contributed a staggering $1.43 trillion to GDP in 1998, is huge in absolute terms -- and has been growing at a fast clip.
Source: Philip Siekman, "The Big Myth About U.S. Manufacturing," Fortune, October 2, 2000.
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