|Rank||Country||GDP in 2012 (trillions)|
The Bureau of Economic Analysis (BEA) released data today on “Gross Domestic Product by Industry” for 2012 with details on the contributions to the nation’s economic output last year that originated from 20 different private-sector industry groups and two government categories (federal and state/local). Here are some highlights of the report:
1. Of the 22 industry groups, 19 made a positive contribution to the real GDP growth last year of 2.2%, and three made a negative contribution (the two government categories and the industry group: Agriculture, forestry, fishing and hunting).
2. Among the 22 industry groups, durable manufacturing led the US economy at 9.1%, which was by far the highest growth rate of any industry, and overall manufacturing grew at a rate of 6.2%. Following manufacturing, the information sector had the next highest growth rate of 5.8%.
3. Total US manufacturing output last year reached $1.866 trillion, which established a new record high for current-dollar manufacturing output in a single year, breaking the previous record in 2011 of $1.73 trillion. In constant dollars, last year’s total manufacturing output was just slightly below the record for factory output established in 2007, before the recession. Durable manufacturing output, adjusted for inflation, exceeded $1 trillion (in 2005 dollars) for the first time, and rose to a new record high.
4. If US manufacturing were counted as a separate economy, it would rank as the tenth largest national economy in the world, see chart above (IMF data here for GDP in 2012). The $1.866 trillion of output produced in America’s factories last year was just slightly below the $2.1 trillion in GDP for the entire economy of Italy, and ahead of the entire national output in India ($1.82 trillion) and Canada ($1.81 trillion).
5. Real value added for construction increased last year by 3.2%, following eight consecutive years of contraction, reflecting strong growth in private residential construction in 2012. This is more evidence that 2012 was the “year of the housing recovery.”
MP: Measured by growth rates in economic output, the manufacturing sector of the economy clearly remains at the forefront of the economic expansion, with especially strong growth in the production of durable goods like automobiles, machinery, appliances, computers and electronic products, and furniture. The manufacturing sector grew last year almost three times faster (6.2%) than the overall economy (2.2%), and the durable goods manufacturing grew more than four times faster (9.1%) than the overall US economy. Of the 2.2% expansion in real GDP last year, about one-third of that growth came from US manufacturing (see Table 2 of the BEA report), even though manufacturing output last year represented only about 12% of total GDP.
Along with manufacturing output that reached new record highs in current dollars in each of the last two years, and is now close to a record high in constant dollars, the US manufacturing sector earned record profits in each of the last two years, totaling more than $1 trillion for 2011 and 2012 combined. Flush with record-level profits, the manufacturing sector has never been financially healthier than it is today and the future of American manufacturing has never looked brighter. After years of negative reports about the decline of American manufacturing, it’s time to recognize that US manufacturing is alive and well – it’s leading the economic recovery, and poised for even greater growth in the future. Manufacturing remains a critical sector of the US economy, and its importance can be understood by realizing that the output produced by America’s factories is the economic equivalent of adding the entire economic output of Italy, India or Canada to the US economy.