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Dr. Chris Kuehl
FMA Economic
Analyst
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Overcoming Manufacturing Myths
There are
many myths
about man-
ufacturing — the most persistent
of which has been that the U.S. is
no longer a country that makes
anything. We all know that this has
never been true, and it certainly isn’t
now. The more persistent myth is
that manufacturing is not contrib-
uting that much to the overall U.S.
economy. It is well-known that the
consumer and service sectors make
up the bulk of the U.S. economy, and
that seems to place the emphasis on
anything but manufacturing. This is
a mistake and misses a key point.
The manufacturing sector essential-
ly underpins much of the service econ-
omy, but this is a point that is more of-
ten missed than acknowledged. It has
been noted that every person working
on the assembly line supports at least
12 to 15 service sector jobs. Just in the
auto industry this is easy enough to
see — think of all the people who sell
the car, insure the car, service the car,
advertise the car, and so on. The core
of all those industries is the manufac-
turing of the car itself.
The export sector is almost entirely dependent on manufactured
goods. Right now the export of
manufactured goods accounts for 60
percent of exports; since the recession the only sector that has consistently grown has been exports. Part
of this expansion is due to the weakness of the dollar, but much of this
growth is the result of the U.S. selling
to nations where that currency value
is not all that significant.
The U.S. advantage in manufacturing has developed through the
advance of technology and robotics,
but it has also developed because of
the improved strategic positioning
of U.S. business. During the last 10
to 15 years, a revolution in management of manufacturing has been a
significant factor as far as the renaissance is concerned. The market for
even the smallest manufacturer is
now global, and as these companies
get more accustomed to this new
situation, they become competitive — even against the low-cost-production nations that appeared to
be taking control of the manufacturing world just a few years ago. n
