Tuesday, September 09, 2008

So we've lost our manufacturing base?

After hearing another protectionist complain that the United States has "completely lost" its manufacturing base, I decided to make a list of the ten countries with the highest manufacturing total value added. These statistics are from the World Bank's World Development Indicators, and give 2005 values expressed in constant 2000 dollars:
  1. United States: $1,680,400,056,320
  2. Japan: $1,100,973,867,008
  3. China: $645,806,030,848
  4. Germany: $420,691,902,464
  5. United Kingdom: $221,911,023,616
  6. France: $200,727,838,720
  7. Italy: $188,876,914,688
  8. South Korea: $184,509,972,480
  9. Canada: $127,123,423,232
  10. Brazil: $110,720,647,168
Listening to Lou Dobbs every night, you'd never know that the United States still leads the world in manufacturing output -- and by a healthy margin! No one disputes that the US economy has become substantially less manufacturing intensive over the last several decades, or that it is in relative terms much less dependent on manufacturing that other world economies. In my view, this is because US firms have found it optimal to specialize in high-skill design and idea creation rather than more labor-intensive manufacturing. But our economy is still so enormous and productive that it has the highest manufacturing output in the world! It's an interesting tidbit to keep in mind, especially for those people under the impression that because we don't manufacture sneakers anymore, we no longer have a manufacturing base at all.

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