Charts of the day, world manufacturing output, 2012

AEI ^ | Mark J. Perry | December 15, 2013

[1rudeboy]

The charts above are based on new data from the United Nations on GDP and its components for more than 200 countries, updated through 2012. Here are some highlights of the UN’s data update:

1. The top chart compares the annual manufacturing output from 1970 to 2012 (measured in current US dollars) for the five countries that produced the most manufacturing output last year: China, US, Japan, Germany, and Korea.  As I reported last year, China officially became the world’s largest manufacturer in 2011, with output in 2011 ($2.34 trillion) that was 20.6% higher than the $1.94 trillion (updated) of factory output in the U.S. In 2012, China’s manufacturing output increased by 9.7% to $2.556 trillion, while factory output in the US increased by 2.6% to $1.993 trillion. For the second year in a row, China was the world’s largest manufacturer and out-produced the US by 28.2%. Previously, China’s manufacturing output exceed German’s factory output in 2000, and Japan’s output in 2006.

2. The U.S. is still a world leader in manufacturing and America’s factory output continues to increase, despite the rise of China to the world’s No. 1 manufacturer. The bottom chart above puts the enormous size of the U.S. manufacturing sector into perspective, by comparing America’s manufacturing output in 2012 ($1.993 trillion) to the combined manufacturing output of Germany, Korea, Italy, Russia, Brazil and India, which are the countries that are ranked No. 4 through No. 9 in 2012 for manufacturing output.

3. It’s also important to remember that China’s manufacturing workforce is estimated to be around 100 million and could be as high as 110 million, compared to America’s manufacturing employment of slightly more than 12 million. Therefore, even though China is producing more manufacturing output than the US, the productivity of American factory workers is so high compared to China, that China needs almost ten factory workers for every one American worker to produce 28% more output. On a per worker basis, the average American factory was responsible for $166,000 of output in 2012, while the average Chinese factory was responsible for less than $26,000 of manufacturing output; the productivity of American factory workers was more than six times that of the average worker in China.

4. Also noteworthy was the fact that South Korea produced more manufacturing output than Italy last for the first time ever, and moved ahead of Italy to become the world’s No. 5 largest manufacturing nation last.  Also noteworthy: India’s factory output exceeded manufacturing production in France for the second straight year, which moved India into ninth place for both 2011 and 2012.

[1rudeboy]

ping

[bigbob]

Thank you, good info.

Here is another chart it is important to understand. Despite the reduction of direct-labor employment, US productivity has skyrocketed, even while other nations have dropped. This is all about American Exceptionalism, we adapt, we retrain, we innovate rather than copy, and ideally we do these things in a free market economy without government interference. The sooner we get less of that, the sooner this trend will continue to spike.

[DannyTN]

The U.S. has 23% unemployment (shadowstats.com). Lowering the import tariffs in the 1960’s with the resulting Chinese emasculation of our industries is why.

Raise the import tariffs, put Americans back to work, restore American industry, make the U.S. less dependent on foreign countries.

[DannyTN]

The U.S. has 23% unemployment (shadowstats.com). Lowering the import tariffs in the 1960’s with the resulting Chinese emasculation of our industries is why.

Raise the import tariffs, put Americans back to work, restore American industry, make the U.S. less dependent on foreign countries.

[1rudeboy]

shadowshadowstats has unemployment at 46%

[knarf]

YahBut ...

According to Forbes, 11/13 ... at least one manufactuter is part of the book cooking ..

"As the author Charles Fishman has pointed out, in former times GE’s Louisville, Kentucky appliance division made all the key components in GE appliances. Now most of those components are being sourced from abroad and virtually the only work being done in Kentucky is a little metal-bashing, plastic moulding, and the perfunctory slotting together of final products. Such work accounts for only a small proportion of total value added and it has been reshored only for logistical reasons.

GE’s Louisville operation once employed thousands of workers to make almost every part of every appliance and their output was used not only in GE products but in products of other manufacturers around the world. Those jobs are gone forever. Not even GE makes any pretense that its most economically sophisticated components such as compressors for refrigerators, electric motors for washing machines, and a host of microchips – will ever return to the United States.

What we are left with is that America has traded places. In the old days it exported small valuable items and left the bulky low value work to lesser nations. Now America specializes in assembling items so bulky that they are exorbitant to ship around the world. Meanwhile it imports virtually all the small high-value stuff."

After reading the headline of this threadc I asked myself, "OK .. but WHAT are we manufacturing ..?"

[DannyTN]

"shadowshadowstats has unemployment at 46%"

No they have it at 23%. Where'd you get 46%?

[1rudeboy]

Just made it up. Like shadowstats.

[1rudeboy]

From the comments:

“what is made in the USA?”

Can’t answer yet for 2012, but the Bureau of Economic Advisors lists these as the top ten manufacturing sectors in 2011 (value added in $ billions):

Chemical products………………………………….$253
Computer and electronic products……………….$227
Food and beverage and tobacco products………$215
Petroleum and coal products……………………..$169
Machinery……………………………………………$132
Fabricated metal products………………………..$122
Other transportation equipment…………………..$94
Miscellaneous manufacturing………………………$80
Motor vehicles, bodies and trailers, and parts….$77
Plastics and rubber products………………………$69

http://www.bea.gov/industry/gdpbyind_data.htm

A few comments about this list:

1. These dollars represent the value added by manufacturing operations in the U.S. It does not include the value of imported components used in that manufacturing process – only the value added. So these totals do not include, for example, the auto components produced in countries such as Mexico.

2. “Other transportation equipment includes not only aircraft but also rail cars,

3. “Petroleum and coal products” does not include the value of extracting petroleum and coal, only the value added by such operations as refineries.

4. “Computer and electronic products” has grown in real dollars by 32% since the supposedly technology boom year 2000.

It is a huge mistake to think that everything of high value is produced in Asian countries.

[DannyTN]

No that would be the government charts that are made up. And they've as much as admitted it.

Shadowstats.com has datasets at their site. They got into the business of unemployment reporting when the Clinton administration defined out of existence the long term unemployed.

[DannyTN]

No that would be the government charts that are made up. And they've as much as admitted it.

Shadowstats.com has datasets at their site. They got into the business of unemployment reporting when the Clinton administration defined out of existence the long term unemployed.

[DannyTN]

"It is a huge mistake to think that everything of high value is produced in Asian countries."

It's not a mistake to walk through stores and notice how much is made in China. And then to look around at how many people are unemployed.

[DannyTN]

Fake Unemployment Report Shocker

Or why there is a need for shadowstats.com.

[1rudeboy]

Oh, no question our government fudges the numbers, too. Emphasis on "too."

In any case, the subject of this thread is manufacturing output, not employment. (Don't mind you talking about employment at all, mind you--just that other people will get confused and think our manufacturing sector doesn't exist).

[Sioux-san]

But that would go against the Goal of the NWO/Globalists

[DannyTN]

U.S. Manufacturing still exists. You can find U.S. Products at Walmart.... if you look hard enough. Might take you a while.

[DannyTN]

U.S. Manufacturing still exists. You can find U.S. Products at Walmart.... if you look hard enough. Might take you a while.

[jpsb]

Let me use Boeing 787 as an example to see if I am following your logic correctly. Disclaimer, my numbers are merely guesses.

A 787 costs about 100 million but most of it's components are produced overseas. So when Boeing puts together a 787 book keepers can claim the USA manufactured 100 million in value. But all Boeing did was assemble 80 million worth of parts to create a 100 million airliner. That 100 million claim should really be a 20 million value added claim.

Is that the argument you are making? TIA

[antidisestablishment]

Tariffs are not the primary reason for the loss of manufacturing jobs.

The lifecycle of American industrial companies does not follow a product lifecycle (introduction, growth, maturity, death); it follows an ownership cycle: sole ownership, family ownership, private incorporation, public corporation. After each cycle, the profit window is reduced in both scope and duration.

The original owner spends a lifetime building something that he can share with his children. Within a few generations, those children sell the inheritance for ‘a mess of pottage’ (quick gain). The original stockholders are generally parties with some experience in the industry or field and tend to manage well, though typically with less growth and innovation. In a good market segment, this period can run for decades and the hard assets that accumulate during this period sets the stage for the last cycle. The last stage is public ownership where the company is now run by stockholders (especially corporate officers) who loot the company’s assets, reduce inventory, and change do whatever they can to inflate the stock price at any cost to increase their own net worth. Everything is reduced to a 90 day window. Long-term is unknown in their lexicon.

Manufacturing is just one of the victims. Pensions are stolen; inventories are sold at a loss; plants are closed; services are outsourced, manufacturing is offshored; Accounting practices are revised to decrease liabilities and increase returns; real property is mortgaged and debt replaces the once-plentiful operating capital. It is the Essau mentality: I will have mine now!

As you can see, American manufacturing is still strong, but it could be stronger. Tariff changes really wouldn’t make a dent; it’s the liability, taxation and regulatory costs that kill the jobs. Introduce tort reform, reduce taxes, and eliminate government interference and American industry would grow exponentially.