AUGUST 2003 VOL. 13, NO. 4

NAM Releases Manufacturing Study

The National Association of Manufacturers (NAM) recently released a study entitled "Making America's Future: The Case for a Strong Manufacturing Base." The study outlined the enormous benefits manufacturers make to the US economy, as well as the sector's most dangerous challenges for its long-term viability.

Among the benefits cited:

• Grows the Economy.
Manufacturing growth spawns more economic activity and jobs than any other economic sector. Every $1 of final demand for manufactured goods generates an additional $0.67 in other manufactured products and $0.76 in products and services from non-manufacturing sectors.

• Invents the Future.
Manufacturers are responsible for almost two-thirds of all private sector R&D - $127 billion in 2002.

• Generates Productivity Increases.
Over the past two decades, manufacturing averaged twice the annual productivity gains of the rest of the private sector. These gains enable Americans to do more with less, increase our ability to compete, and facilitate higher wages for all employees.

• Provides More Rewarding Employment.
Manufacturing salaries and benefits average $54,000, higher than the average for the total private sector.

• Pays the Taxes.
Manufacturing has been an important contributor to regional economic growth and tax receipts at all levels of government.

However, there are some serious challenges facing the long-term viability of the US manufacturing base and the innovation process that underlie it, including:

• Loss of Jobs.
Since July 2000, manufacturing has lost 2.3 million jobs, many of which have been outsourced or relocated overseas. Manufacturing output has shown virtually no growth since December 2001 in the weakest manufacturing recovery since 1919.

• Loss of Export Potential.
Manufacturing exports as a share of GDP have contracted since 1997, reflecting the strong dollar overseas, the impact of the recession on our trading partners, the terrorist attacks in the US, and increased global competition. The US trade deficit has ballooned to historic highs.

• Investments Are Going Elsewhere.
US manufacturing's share of capital investment and R&D expenditures, once a dominant feature of our nation's commitment to progress, is diminishing.

• Needs More Skilled Workers.
Despite the loss of 2.3 million jobs, manufacturing is facing a potential shortfall of highly qualified employees with specific educational backgrounds and skills, especially those specific skills needed to produce manufactured goods.

• Faces Dramatically Rising Costs.
The cost of doing business in the US is rising dramatically, in large measure because of significant costs related to healthcare, litigation and regulation.

You can download a copy of the complete study at www.nam.org/future.

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