U.S. Manufacturing in International Perspective (CRS Report for Congress)
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| Release Date |
Revised Feb. 21, 2018 |
| Report Number |
R42135 |
| Report Type |
Report |
| Authors |
Marc Levinson, Section Research Manager |
| Source Agency |
Congressional Research Service |
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Summary:
The health of the U.S. manufacturing sector has long been of great concern to
Congress. The
decline in manufacturing employment since the start of the 21
st
century has stimulated particular
congressional interest
, leading
Members
to
introduce hundreds of bills
over many sessions of
Congress
intended to support domestic manufacturing
activity in various ways. The proponents of
such measures frequently contend that the United States is by various measures falling behind
other countries in manufacturing, and they argue that this relative decline can be mitigated or
reversed by governmen
t policy.
This report is designed to inform the debate over the health of U.S. manufacturing through a
series of charts and tables that depict the position of the United States relative to other countries
according to various metrics. Understanding which t
rends in manufacturing reflect factors that
may be unique to the United States and which are related to broader changes in technology or
consumer preferences may be helpful in formulating policies intended to aid firms or workers
engaged in manufacturing a
ctivity. This report does not describe or discuss specific policy
options.
The main findings are
the following
:
The United States’ share of
global manufacturing activity declined
from 28% in
2002, following the end of
a
U.S. recession, to 16.5% in 2011
.
B
y 2016,
the U.S.
share
rose
to
over
1
8
%
, the largest share since 2009
. These estimates are based
on the value of each country’s manufacturing in U.S. dollars
; part of the decline
in the U.S.
share was due to a 23% decline in the value of the dollar between
2002 and 2011, and part of the
subsequent
rise is attributable to a stronger
dollar.
China displaced t
he United States
as
the largest manufacturing country in 2010
.
Again,
part of China’s rise by this measure
has been
due to the appreciation of its
curren
cy, the
renminbi
, against the U.S. dollar.
The reported size of China’s
manufacturing sector decreased in 2015
and 2016
due to currency adjustments.
Manufacturing output
, measured in each country’s local currency adjusted for
inflation,
has
been growing
mo
re
slowl
y in the United States than in
China,
South Korea
, Germany, and Mexico
, but more rapidly than in m
any
European
countries and Canada
.
Employment in manufacturing has fallen in most major manufacturing countries
over the past
quarter
-
century. In the
United States, manufacturing employment
since 1990 has declined
in line with the changes in
W
estern Europe and
Japan
,
although the timing of the decline has differed from country to country
.
U.S. manufacturers
’ spending for
research and development (R&D)
rose 10.5%
from 2010 to 2015, adjusted for inflation.
M
anufacturers’ R&D spending
rose
more rapidly in
several other countries
.
Manufacturers in
many
countries
have increased
spending on R&D, relative to
value added
in the manufacturing sector
, but U.S.
manufacturers
’
R&D intensity
has changed little since 2008
. A large proportion of U.S. manufacturers’ R&D
takes place in high
-
technology sectors
such as
pharmaceutical
,
electronic
s, and
aircraft
manufacturing, whereas in
most
other countries
the largest sh
are
of
R&D
occur
s
in medium
-
technology sectors such as
automotive
and machinery
manufacturing.
