It appears to be the total dollar value of all widgets produced.
“Manufacturing output refers to the total inflation-adjusted value of output produced by manufacturers. Announcements of manufacturing output include month-over month and year-over-year changes in manufacturing production.”
Source:
http://www.wikinvest.com/wiki/Manufacturing_Output
Right. That means if this year a foreign factory makes a ton of steel worth $50, then it's measured industrial production is less that than of an American factory that uses half of that steel to produce 20,000 precision scalpels worth $1,000 each. Foreign tonage is twice the American output whose output dollar value is 400,000 times as great.
The number comes in handy for making investments or understanding the economy, although it's useless for arguing w/ protectionists..