The State of Manufacturing in the U.S.

by Don Boudreaux on September 15, 2007

in Myths and Fallacies, The Future

I have never believed that making things is inherently better — inherently more likely to produce widespread prosperity, inherently more noble, inherently more meaningful — than is the supplying of services.  And until I notice a widespread pattern of parents hoping that their children grow up to become factory workers rather than to become doctors, lawyers, and bank presidents, I’ll continue to believe that, whether they know it or not, most Americans value jobs in the service sector pretty darn highly.

Nevertheless, the state of manufacturing in the U.S. is quite strong.  To learn more, take this quiz:

1)     In what year did
U.S. Manufacturing output reach its all-time peak?
1966   b.
1976   c. 1986   d. 1996   e.

2)     In what year did
U.S. Manufacturing revenue reach its all-time peak?
1966   b.
1976   c. 1986   d. 1996   e.

3)     In what year did
U.S. Manufacturing profits reach their all-time peak?
1966   b.
1976   c. 1986   d. 1996   e.

4)     In what year did
U.S. Manufacturing exports reach their all-time peak?
1966   b.
1976   c. 1986   d. 1996   e.

5)     Average annual
compensation (wages + benefits) for US manufacturing jobs is
b. $46,0000  c. $56,0000  d. $66,000

6)     What are the
relative sizes of the US and Chinese manufacturing
China outputs 2.5
times the US  b. Equal  c. The US outputs 2.5 times

7)     Which country
produces the largest share of total world manufacturing
China   b.
Japan   c. Germany   d. France   e.


1)  e. 2006 (Source: Economic Report of the President, 2007)

2)  e. 2006 (Source: Bureau of the Census)

3)  e. 2006 (Source: Bureau of the Census)

4)  a. 2006 (Source: U.S. International Trade Commission)

5)  d. $66,414 (Source: National Association of Manufacturers)

6)  c. The U.S. output is 2.5 times as much as China (Source: U.N. Industrial Development Org.)

7)  e. U.S. manufacturing output is 21 percent of world total (Source: U,N. Industrial Development Org.)

(HT: David Boaz)

This study by Cato’s Dan Ikenson has the fuller story.

Be Sociable, Share!



15 comments    Share Share    Print    Email


JimVAT September 15, 2007 at 2:09 pm

Good article, but "fuller"? You probably meant "complete".

George September 15, 2007 at 3:15 pm


The answers to your first three questions are d) d) and d) (2006). Your answers were correct, but you mis-identified the letter.

Shakespeare's Fool September 15, 2007 at 10:59 pm

Either that or he was making predictions for 2007.

SaulOhio September 16, 2007 at 6:32 am

I have to show this to friends and co-workers of mine who keep telling me "we don't make anything in America anymore".

Frontlinegrunt September 16, 2007 at 9:32 am


Technically, you are correct with the 2006 answers.

However, if you adjust for the loss of purchasing power of our currency (related to gold or the other precious metals) I think you will find 2006 to be not the correct answer.

I'm so happy to find an economic realist on the web.

Ohio_liberty September 16, 2007 at 12:33 pm

Waiting for commentary from save_the_rustbet.

AE September 17, 2007 at 4:44 pm

I'm surprised these facts aren't common knowledge. The ISM manufacturing index has been averaging well above 50 (signaling expansion) since the 2001 recession. People also don't seem to know that total exports hit an all-time high in 2006. The biased news coverage given to outsourcing and trade deficits have clouded economic reality for much of the public.

Ellen September 20, 2007 at 1:51 pm

Parents do raise children to be the factory workers: we are the engineers (myself), chemists, biologists, industrial pharmacists, management, supervisors, health and environmental specialists, occupational medicine (doctors), researchers, skilled mechanics and electricians, and yes – highly skilled workers who can make $20+/ hour and in addition receive comprehensive benefits and a pension.

Danny L. McDaniel September 24, 2007 at 3:09 pm

Go to the Southside of Detroit and tell me all the closed factories don't look like ruins from a once great civiliztion. The US cannot even produce a television.

Perry Eidelbus September 24, 2007 at 5:02 pm

Because, Danny Boy, the jobs moved elsewhere and *improved*. Instead of laboring in factories, we make Microsoft software and Boeing airplanes, and perform investment banking. Surely that's better work and produces greater value than your mere televisions, or do you disagree?

So what if the U.S. can't produce a television? That's beneath our capabilities. I could be mopping floors for my job, but type on keyboards instead, yet nobody laments that I'm doing hard work.

Perry Eidelbus September 24, 2007 at 11:45 pm

That is, I should have said, "yet nobody laments that I'm not doing hard work."

Steven Capozzola October 1, 2007 at 3:02 pm

Please share your manufacturing stories.

We’re a national, non-partisan group dedicated to strengthening U.S. manufacturing. Our blog,, covers issues related to trade policy and saving U.S. manufacturing jobs. As of today, we’ve begun compiling firsthand accounts of the carnage left behind when factories close and jobs leave the country.

We’re asking you to please sound off, and share your stories. You can either email me at to send a article or story (to be featured on the blog), or go directly to the blog and post a comment.

The launch of this new story feature is available at:


john lafrance March 14, 2008 at 4:06 pm

Question is this:

Can you put a dollar value on the size of the United States manufacturing sector? How much do we really manufacture in terms of dollars?….What are all our manufactured goods worth in a year of time. It is not the GDP or the GNP. And you haven't answered that most important question above.

Please answer in English please. NO MUSH!

thank you!

Craig April 27, 2008 at 3:23 pm

I'd like to see more detailed info to buy into those numbers.

For example, they don't appear to be adjusted for inflation/size of our population, but absolute numbers; and things like 'manufacturing' weapons might be a big part of the story.

Unfortunately, the info lacks details and it lacks links to details.

Anonymous August 11, 2009 at 9:59 pm

American service sectors rule, dude. Just look at American investments banks … oh wait … it’s 2009 now.

Never mind.

Anyway, I followed the link from the recent Peter Schiff post. You are not really criticizing Peter Schiff, because again if you follow him closely he will also say that service sector improvements are not inherently any less good than production improvements. That is in principle I think he agrees with you. However, he was arguing that a lot of America’s service sector was based on fluff that resulted in a system whereby the Fed helps the economy by printing cash. Also I think he would argue your measurements aren’t entirely correct because they are in dollars, which are overvalued (for political reasons).

He often used the financial sector as an area where supposedly America offered really good services, but he stated this was completely false. He seems to have been spot on.

I think you need to take a closer look at Peter Schiff is saying.

Previous post:

Next post: