U.S. Manufacturing: Set to Become the Next Big Thing

The U.S. manufacturing complex out produces every other country in the world except China. In terms of manufacturing value added, which is basically the value of the output minus the costs of the input, the U.S. produces almost twice as much as Japan, more than three times as much as Germany, and five times as much as India. To really understand the power and influence of U.S. manufacturing, it is important to be familiar with the basic steps an economy takes from relatively simple manufacturing, such as textiles and apparel, all the way to advanced pharmaceuticals and electronics. After all, if a country wants to maintain a high and growing standard of living, the economy must continue to move up the value chain of services and manufacturing as well as continually improve productivity.

When agrarian economies first industrialize, they tend to focus on the lowest value-added items. Once those economies reach a certain size and manufacturing skillset, they can then advance to middle level value added, just has China has done in recent decades and Japan did before that.

The next phase is to move to the high value-added areas, where the U.S. is today. For example, the U.S. leads global manufacturing value added in 7 of 16 categories, many of which are in the highest value-added industries, such as the chemicals and pharmaceuticals industry, the computer, electronic, and optical products industry, and the motor vehicles, trailers, and semi-trailers industry.

Since this data covers multiple industries for multiple years and is very comprehensive, it is somewhat dated (i.e., 2015). Nonetheless, it likely provides a close representation as national activity evolves slowly.

Manufacturing Value Add Ranking