#1 Manufacturer

Discussion in 'Economics' started by ShoeshineBoy, Aug 18, 2008.

  1. Few people realize that the U.S. is the world's #1 manufacturer by far and will stay that way for a long time per a recent Fin. Times article:


    American industry can stay ahead of China
    By John Engler

    Published: August 17 2008 19:06 | Last updated: August 17 2008 19:06

    According to a report last week in the Financial Times, China is now reverting to form as the world’s workshop and will overtake the US as the world’s largest manufacturer next year. I and members of the National Association of Manufacturers strongly disagree with this prediction.

    China has a long way to go to catch up with the US. The NAM’s analysis shows that in terms of real manufacturing value-added (price-adjusted, to reflect the quantity of output) the US remains by far the world’s largest manufacturer, producing nearly one-fourth of the world’s industrial output. Based on the highly respected World Bank database, our analysis also shows that we will produce twice as much this year as the fourth placed economy, China (the European Union and Japan are in second and third position, respectively). Even in current measures of manufacturing denominated in dollars (which inflate China’s position because of the rising yuan and other factors), China will produce only about 60 per cent as much as the US in 2008.

    Far from overtaking the US next year, if China were to be able to continue its rapid 10 per cent-plus real annual rate of manufacturing growth, it would not equal US manufacturing production until nearly 2020. Moreover, given the constraints China is beginning to face, its ability to maintain that torrid growth is highly questionable.

    Let me be clear. The only way China could surpass US manufacturing next year would be for the US to encounter an economic catastrophe of some kind. That would not be wholesome for us or anyone. It is possible – but not certain – that China may, in some future decade, become the world’s largest manufacturer. If this occurred because the Chinese economy moved away from export-led growth and began to see the type of domestic-led growth that Hank Paulson, the US Treasury secretary, has been trying to get them to adopt, this could elevate China’s living standard and create more demand for all goods and services in China – including imports from the US and the rest of the world. That would be a positive contribution to the global economy.

    However, if China were to surpass US industrial production because it continued to rely on export-led growth that exacerbated global trade imbalances, that would be a strongly negative factor. It would not just be the US that was affected. For example, even now, the EU’s trade deficit with China is on the verge of overtaking our own huge deficit with China this year.

    Looking to our own manufacturing future, there is no question that we need a vibrant manufacturing sector that will increase our standard of living, provide the defence industrial base that our security demands and continue to be the technological underpinning of US economic growth.

    It is remarkable how the perception of American manufacturing differs from reality. Not only is the US the world’s largest manufacturer, but US manufacturing output in 2007 set an all-time record. While there are more than 3m fewer manufacturing jobs than in 2000, our productivity has grown so rapidly that today 75 workers produce what it took 100 workers to produce then. This is not to say US manufacturing does not face serious problems. We have barely emerged from a five-year manufacturing recession and now face the prospect of renewed slow growth. We have a manufactured goods trade deficit at an annual rate of $440bn (€300bn, £236bn) this year, which, while down $120bn from its peak, is still too large.

    But our manufacturing future is in our own hands. Congress and the next administration will have significant impact on the environment for US manufacturing and its ability to compete globally. For the US to stay ahead of China and maintain world leadership, we must reduce corporate tax rates, which are the highest in the world, develop more of our domestic resources to ensure an affordable supply of energy, provide more generous incentives for research and development, train a new generation of skilled workers and move aggressively to expand exports with more free trade agreements – just as China is now doing. We also need to tackle the foreign barriers to trade that Congress has declined to remove as it holds up trade agreements with markets such as Colombia, Panama and South Korea.

    America’s manufacturing future is bright, but we need our own government to be our ally. With support in Washington, US manufacturing will continue to bring home the gold.

    The writer is president of the US National Association of Manufacturers
  2. Sugar coat version. The rest of the story is that the US is also the world's biggest importer.

    We're sending $700-$750 Billion per year overseas for consumption... some of that money into the hands of folks who are not exactly our friends.

    How long can Amerika remain viable if we continue to send $TRILLIONS overseas?
  3. jjf


    Please keep it simple gnome otherwise the teeming masses will be left behind.

    example only
    I manufacture teddy bears in RI and my company has been in business for 60 years.
    Bears were costing 45 bucks to build and selling out the door for 60.
    All material and labour was sourced in the US and the 60 bucks stayed in the US.

    Now the bears are built in China for an imported cost of 20 bucks.
    My Panama wholesaling company skims 30 bucks and the bear sells for 60 bucks at the door in RI

    I report a manufacturing cost of 60 but only 10 dollars stays in US.

    Yes, US manufacturing is more efficient than ever.

    While I am on a roll here I would say that US economy is closer to 10T than 14T
  4. US manufactured products, do you have the statistics on this, like what type of products are produced, cost and price examples, obviously i'm talking about the main products produced in US
  5. jjf


    I can only quote teddy bears, but the structure remains the same.

    Let us pretend we make aircraft in Seattle.
    I know I know the whole idea is absurd.

    However we assemble a plane ( let us call it a dreamliner) and claim the entire content as US made simply because it is billed as such.
    But can you imagine some of our international Customers have wanted to sub-manufacture parts in their own country and then export them to the assembly line in Seattle.

    How can they possibly demand such a thing and the simple fact they can do it at a cost lower than ours is simply outrageous.

    Well, because we are sooooo nice (and the lower costs have nothing to do with this exercise) we go along with the notion.

    Proudly made (almost) in the US.
    In fact we are sooooo nice that one day we will sub contract everything but the billing which will always remain 100% US.
    Even the paint job will be done in Guaremala eventually.
  6. Tums


    There should be a Pollution Tax on products made in countries with low pollution control standards.
  7. Gummint's creative accounting at its finest.... along with including McDs fry cooks in "manufacturing" because they "manufacture" hamburgers...
  8. jjf


    You mean similar to the one never paid by US as it built it's manufacturing base only to export it to low cost countries.

    You do realise that the Customer (that is you Tums) always pays the tax in the end.

    Bravo for offering
  9. paying taxes on depleted uranium bombs; you are out of your minds.

    non over the less; you are say we have to pay taxes on things we built; then paying taxes when we're using them; you are either freaking communist or working for governments.

    That is right; anyone working for governments is a fucking communist.
  10. Globalization lends itself to being a labor cost/wages equilabrator.

    And nobody said it was going to be fast in transition, or not vague on US corporate accounting books.

    This means that some people actually have to move out of the country and actually take less in order to have a job.....or simply take less in the US.

    The problem is that the legal/medical cost component of many US products is more than the total cost of production in some countries.....Thus even if some US labor were willing to work for nothing, the US cost would still be higher versus some other countries.

    Furthermore the chances that other countries will bow down to US demands to increase their costs will not happen willfully.

    This is about as effective as asking OPEC to take 50% less for their oil.

    As long as PRICE is the major decision component, efficiency is where efficiency is.....and the free market will move to where efficiency lives.....

    Socialism says the price has to include medical/legal. The free market says ok....hand over your jobs.

    Legal largesse, medicine as a business, and a total lack of an energy policy just boils down to bullshit leadership....

    And everyone knows who it is.....

    Politics and tax money spell socialism, especially when combined with poor, inefficient management.....

    The structure has to be changed....no doubt about it.....

    Is it not interesting that the US and Venezuela are both in the process of nationalizing their banks ?
    #10     Aug 18, 2008