Manufacturing

Over the last two years, the U.S. economy has added 830,000 manufacturing jobs. At first glance, this suggests a renewed strength in manufacturing. In reality, it masks a new weakness: productivity decline.

Supporting manufacturing to lower the trade deficit doesn’t have to mean the dreaded “picking winners”. It could mean an investment tax credit and much higher R&D tax credit. It could be official policy to not defend the dollar. It could mean a regulatory system that spurs innovation.

After falling from its peak of 5.7 percent in 2006 to 3.6 percent in 2019, the United States’ manufacturing trade deficit as a share of its GDP has risen to 5.3 percent in 2022 through June, its highest level since 2008 (5.5 percent).

Catherine Rampell’s recent Washington Post column parrots conventional “inside the beltway” wisdom about U.S. manufacturing but demonstrates that pundits often don’t understand real economics.

Industrial robot concentration is especially high in Michigan, where 39.5 percent of manufacturing employees had exposure to them in 2019.

The United States is addressing its anemic share of the semiconductor fabrication market (which was 40 percent in 1990) through the CHIPS for America Act and U.S. Innovation and Competitiveness Act. But while these measures are steps in the right direction, they only address a narrow set of the electronics ecosystem.

Manufacturing capacity utilization in the United States has fallen steadily since the 1970s as manufacturing relocated from the United States to regions such as Southeast Asia, and it remains 9 percentage points below its high in November 1973.

Watch ITIF and an expert panel featuring key policymakers and leading analysts who discussed how to bring House and Senate versions of competitiveness legislation across the finish line in a form that will be a winner for U.S. workers and the economy.

From 2000 to 2016 new robot adoption grew by roughly 70 percent in North America and Europe, whereas it grew more than 300 percent in the rest of the world.

Now is the time to launch a new Manufacturing USA institute to support manufacturing research and manufacturing at scale in low Earth orbit (LEO), and build the space workforce of the future