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What is Manufacturing?

Manufacturing – Mechanical, physical, or chemical transformation of materials, substances or components into new products.

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Importance of Manufacturing

• U. S. is the world’s largest manufacturing country, producing approximately 21 % of the world’s manufactured goods. Source: United Nations, 2009.

• Manufacturing comprises 11.7 % of GDP. Source: US Bureau of Economic Analysis.

• Manufacturing comprises 9.0 % of total U.S. employment, directly

employing 10.9 million workers. Source: US Census Bureau

• 70 % of all business Research & Development in the U.S. is done by

manufacturing companies. Source: National Science Foundation

2

3

4

Types of Manufacturing

• 15% Transportation Equipment – Automobile manufacturers – Aircraft manufacturers

• 7% Machinery – Construction Machinery – Farm Machinery

• 13% Food Products – Grain Milling – Meat, poultry and seafood production

• 14% Petroleum and Coal Products – Petroleum Refineries – Asphalt Plants

.

5

Types of Manufactured Goods

• Durable Goods – Hard Goods: Goods that generally last 3 years or longer.

– Examples: Automobiles, jewelry, tractors

• Non-Durable Goods – Soft Goods or consumables: Goods that are used immediately or consumed in less than 3 years.

– Examples: Gasoline, food, beverages.

6

Value of Shipments of Manufacturing Industries: January 1996 - August 2012

Source: U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders Survey, 1996-2012

$0

$100

$200

$300

$400

$500

$600

1996 1999 2002 2005 2008 2011

Billions of Dollars, Seasonally Adjusted

$287.0 Billion

$476.9 Billion Total

Manufacturing

Recession

Durable

Goods

Industries

Nondurable

Goods Industries

$156.9 Billion $222.4 Billion

$130.2 Billion

$254.5 Billion

7

Shipments and New Orders of Durable Goods: January 1996 - July 2012

Source: U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders Survey, 1996-2012

$0

$50

$100

$150

$200

$250

$300

1996 1999 2002 2005 2008 2011

$230.7 Billion

Billions of Dollars, Seasonally Adjusted

$156.9 Billion

$155.9 Billion

$230.5 Billion Shipments

New Orders

Recession

8

Historical Percentage of Shipments of

Select Durable Goods: July 2012

Source: U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders Survey, 1996-2012. July 2012 Historic Timeseries NAICS, July 1958 and July 1975 Historic Timeseries SIC.

2.4%

2.8%

0.5%

3.4%

16.5%

6.3%

8.8%

4.5%

6.1%

4.2%

3.0%

1.2%

Construction Machinery

Electromedical, Measuring, andControl Instruments

Computers

Medical Equipment

1958 1975 2012

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Shipments and New Orders of Transportation Equipment:

January 1996 – July 2012

Source: U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders Survey, 1996-2012

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

1996 1999 2002 2005 2008 2011

$69.8 Billion

Billions of Dollars, Seasonally Adjusted

$40.4 Billion

$43.9 Billion

$80.6 Billion

Shipments

New Orders

Recession

10

Shipments and Exports, U.S. Manufacturing:

2000 – 2011

Source: U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders Survey, 1996-2011 U.S. Census Bureau, Foreign Trade Division, U.S. Trade 2000 – 2011.

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Billions of Dollars, Not Seasonally Adjusted

$4208.6

Billion

$5491.4

Billion Total Manufacturing

Recession

Manufactured

Exports

$707.2

Billion

$1276.3

Billion

11

Sales, Shipments, and Exports of Motor Vehicle and Parts:

January 1996 - July 2012

Source: U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders Survey, 1996-2012 U.S. Census Bureau, Monthly Retail Trade Survey, 1996 -2012 *U.S. Census Bureau, Foreign Trade Division, U.S. Trade 2000 – 2012. Export data not seasonally adjusted.

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

1996 1999 2002 2005 2008 2011

$49.6 Billion

Billions of Dollars, Seasonally Adjusted

$30.9 Billion

$44.9 Billion $75.5 Billion

Shipments

Retail Sales

Recession

Exports* $9.1 Billion

$4.9 Billion

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Source: U.S. Census Bureau, County Business Patterns, 2010 13

Source: U.S. Census Bureau, County Business Patterns, 2010 14

Examples of Machinery

– Construction equipment: Bulldozers, Backhoes, Road Graders

– Industrial Machinery: Used to produce products such as, textiles, semiconductors, plastics, rubber and food processing.

– Material Handing equipment: Elevators, Moving stairways, Conveyors, Stacker Machinery

– Farm Machinery: Tractors, Combines, Plows

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Shipments and New Orders of Machinery:

January 1996 – July 2012

Source: U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders Survey, 1996-2012

$0

$5

$10

$15

$20

$25

$30

$35

$40

1996 1999 2002 2005 2008 2011

$33.0 Billion

Billions of Dollars, Seasonally Adjusted

$20.9 Billion

Shipments

Recession

New Orders

$21.2 Billion

$30.2 Billion

16

Shipments and Exports of Machinery:

January 1996 – July 2012

Source: U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders Survey, 1996-2012 U.S. Census Bureau, Monthly Retail Trade Survey, 1996 -2012 *U.S. Census Bureau, Foreign Trade Division, U.S. Trade 2000 – 2012. Export data not seasonally adjusted.

$0

$5

$10

$15

$20

$25

$30

$35

$40

1996 1999 2002 2005 2008 2011

$33.0 Billion

Billions of Dollars, Seasonally Adjusted

$20.9 Billion

Shipments

Recession

Exports*

$6.6 Billion

$13.6 Billion

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Comparison of Shipments and Exports of Construction

Machinery to Shipments of Industrial Machinery:

January 1996 – July 2012

Source: U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders Survey, 1996-2012 U.S. Census Bureau, Monthly Retail Trade Survey, 1996 -2012 *U.S. Census Bureau, Foreign Trade Division, U.S. Trade 2000 – 2012. Export data not seasonally adjusted.

$0

$1

$2

$3

$4

$5

$6

1996 1999 2002 2005 2008 2011

$3.4 Billion

Billions of Dollars, Seasonally Adjusted

$3.2 Billion

$1.6 Billion

$5.5 Billion

Industrial

Machinery

Construction

Machinery

Recession

$2.2 Billion

$0.7 Billion Construction

Machinery Export*

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Why are Primary Metals

Important to the Economy?

Source: U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders Survey, 1996-2012

• Base manufacturing industry

• Feeds into other sectors of the economy, from the manufacturing of automobiles to fabricated structural steel for construction projects like bridges or new office buildings.

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Shipments of Primary Metals and Transportation

Equipment: January 1996 – July 2012

Source: U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders Survey, 1996-2012

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

1996 1999 2002 2005 2008 2011

$28.3 Billion

Billions of Dollars, Seasonally Adjusted

$12.7 Billion

$40.4 Billion

$69.8 Billion

Primary

Metals

Transportation

Equipment

Recession

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Shipments of Food products, Petroleum and Coal Products,

and Chemical Products: January 1996 – July 2012

Source: U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders Survey, 1996-2012

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

1996 1999 2002 2005 2008 2011

$60.7 Billion

Billions of Dollars, Seasonally Adjusted

$33.3 Billion

$13.3 Billion

$68.6 Billion

Food

Products

Petroleum and

coal products

Recession

Chemical

Products

$30.8 Billion

$62.1 Billion

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Shipments of Chemical Products and Pharmaceuticals

and Medicines: January 1996 – July 2012

Source: U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders Survey, 1996-2012

$0

$10

$20

$30

$40

$50

$60

$70

$80

1996 1999 2002 2005 2008 2011

$62.1 Billion

Billions of Dollars, Seasonally Adjusted

$30.8 Billion

$6.8 Billion $14.3 Billion

Chemical

Products

Pharmaceutical

and Medicines

Recession

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Capacity Utilization Rates of U.S. Manufacturing:

2008-2012

50

55

60

65

70

75

80

2008 2009 2010 2011 2012

FU

LL

CA

PA

CIT

Y U

TIL

IZA

TIO

N R

AT

ES

(P

erc

en

t)

QUARTER

Q1

Q2

Q3

Q4

Note: These data are not adjusted for seasonal variation, holidays, or trading-day differences. Source: U.S. Census Bureau, Quarterly Survey of Plant Capacity Utilization, 2008-2011 23

Manufacturing companies account for majority

of US R&D performance

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Since 2004, Manufacturing companies have accounted for about 70% of total domestic

R&D performance annually.

Source: National Science Foundation and U.S. Census Bureau, Survey of Industrial Research and Development 2004 – 2007; Business R&D and Innovation Survey 2008 - 2009

0

50

100

150

200

250

300

2005 2006 2007 2008 2009

Billions US dollars

Manufacturing

Non-Manufacturing

Total Capital Expenditures for Selected U.S. Industry Sectors: 1996 to

2010

0

50

100

150

200

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Bill

ion

s o

f D

olla

rs

Recession

Mining

Manufacturing

Information

Finance

Note: Prior to 1998 data for the Information sector was included in Manufacturing Source: U.S. Census Bureau, Annual Capital Expenditures Survey 25

Percentage of U.S. Manufacturing Total Capital Expenditures for Selected

Subsectors: 1996 to 2010

Note: Prior to 1998 data for semiconductors was included in communications

equipment and electronic components and equipment manufacturing.

Source: U.S. Census Bureau, Annual Capital Expenditures Survey

0

2

4

6

8

10

12

14

16

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Pe

rce

nt Recession

Motor Vehicles

Semiconductors

Petroleum

Food

26

*SIC Classification Basis 1996-2000 NAICS Classification Basis 2001 – Present Source: U.S. Census Bureau, Quarterly Financial Report, 1996 – 2011

(100)

(75)

(50)

(25)

0

25

50

75

100

125

150

175

200

1996 1999 2002 2005 2008 2011

U.S. Manufacturers - Net Income After Tax Billions of Dollars, Not Seasonally Adjusted*

Recession

TotalManufacturing

NondurableManufacturing

DurableManufacturing

27

*SIC Classification Basis 1996-2000 NAICS Classification Basis 2001 – Present

Source: U.S. Census Bureau, Quarterly Financial Report, 1996 – 2011

(30)

(20)

(10)

0

10

20

30

40

50

1996 1999 2002 2005 2008 2011

U.S. Nondurable Manufacturers - Net Income After Tax Billions of Dollars, Not Seasonally Adjusted*

Recession

Beverage andTobaccoProducts(Included inFood until 4thQuarter 2000)

Petroleum andCoal Products

Chemicals

28

*SIC Classification Basis 1996-2000 NAICS Classification Basis 2001 – Present Source: U.S. Census Bureau, Quarterly Financial Report, 1996 – 2011

(50)

(40)

(30)

(20)

(10)

0

10

20

30

40

50

1996 1999 2002 2005 2008 2011

U.S. Durable Manufacturers - Net Income After Tax Billions of Dollars, Not Seasonally Adjusted*

Recession

Machinery

Computer andElectronicProducts(Included inMachinery until4th Quarter 2000)

TransportationEquipment

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