Manufacturing Moves the Nation

Even with the growth in technology and service sectors, manufacturing contributes $2.33 trillion to the U.S. economy. Many other critical business sectors, from mining to finance to supply chain partners, rely on the success of the manufacturing sector.

After all, manufacturers, supply chain professionals and logisticians are really engaged a symbiotic relationship. One could simply not survive without the other. Transportation is key to raw materials inputs and to moving components for value-added handling. It is essential to delivery to distribution centers. It is integral to home and business deliveries via parcel carriers as well as truckload and LTL moves.

That's why we celebrate manufacturing. Just look at the numbers. Taken alone, U.S. manufacturing output is the ninth-largest global economy in terms of gross domestic product. Today, manufacturing represents 11.6 percent of the total U.S. GDP.

The economic flow from manufacturing supports many aspects of the economy we take for granted, including automotive and housing production. Those who work in manufacturing typically play a significant role in consumer spending that ripples through small businesses and the service sector. Historians agree the global standard of living improved as the Industrial Revolution began to shift society from an agrarian economy to one more reliant on manufacturing.

For example, every $1 spent in manufacturing adds $1.89 to the economy, the highest multiplier effect of any sector according to the National Association of Manufacturers (NAM). In fact, a single worker in manufacturing leads to four more employees hired elsewhere.

Over the past two decades, domestic and global manufacturing has experienced astonishing growth. According to the NAM:

  • U.S.-manufactured goods exports have quadrupled since 1990, even taking into account dampened exports demand in 2015.
  • World trade in manufactured goods nearly tripled between 2000 and 2014, expanding from $4.8 trillion to $12.2 trillion.
  • Overall, the U.S. consumes $4.1 trillion - or about 34 percent - of the global trade in manufactured goods.
  • Direct employment in manufacturing represents 8.6 percent of the workforce or nearly 12.75 million jobs. There are 7.98 million workers in durable goods production and 4.77 million workers in nondurable goods manufacturing, according to the Bureau of Labor Statistics (BLS). Manufacturing has rebounded from the recession, adding more than 1 million workers.

Much like the trucking and housing industries, manufacturing faces a labor shortage. The BLS reveals that manufacturers reported 475,000 job openings this past summer. Over the next 10 years, some 2 million jobs will go unfilled due to the skills gaps.

In fact, 80 percent of manufacturers say they face a moderate or severe shortage of qualified applicants for skilled production positions, according to a report from the Manufacturing Institute.

Unfortunately, many members of the public see manufacturing jobs as dirty, dangerous and low-skilled. Nothing could be further from the truth. Many modern factory jobs require math and computer skills, as well as industry-specific know-how.

Despite common fears that automation in manufacturing eliminates jobs, it actually creates them. Automation allows workers to spend their time at higher-level tasks, transforming the industry. For example, the Detroit area grew manufacturing jobs 40 percent even as more factories added automation, according to NAM.

Productivity has grown as manufacturers compete globally using lean systems. Overall, manufacturing output per hour has risen 2.5 times since 1987, and durable goods manufacturing has nearly tripled labor productivity.

Manufacturing clearly matters to America, with a crucial role in sustaining economic stability, raising our standard of living and maintaining our national security. We honor those who work in manufacturing across our country and those who promote policies and career opportunities that make our country strong.

Transportation Insight empowers its manufacturing clients to focus on their areas of expertise while we hone their logistics and supply chain/digital design, planning and execution. With a continuous improvement mindset based in lean methodology, Transportation Insight’s manufacturing supply chain solutions identify opportunities for performance improvement that result in greater efficiency, cost-savings and enhanced customer satisfaction.

Whether leveraging drop-shipment strategies that require multi-modal transportation expertise, exercising enhanced visibility to transportation movements or executing on actionable, data-driven business intelligence, Transportation Insight manufacturing clients enjoy the support of a trusted adviser capable of accelerating bottom line performance.

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