The charts above are based on new data from the United Nations on GDP and its components for more than 200 countries, updated through 2012. Here are some highlights of the UN’s data update:
1. The top chart compares the annual manufacturing output from 1970 to 2012 (measured in current US dollars) for the five countries that produced the most manufacturing output last year: China, US, Japan, Germany, and Korea. As I reported last year, China officially became the world’s largest manufacturer in 2011, with output in 2011 ($2.34 trillion) that was 20.6% higher than the $1.94 trillion (updated) of factory output in the U.S. In 2012, China’s manufacturing output increased by 9.7% to $2.556 trillion, while factory output in the US increased by 2.6% to $1.993 trillion. For the second year in a row, China was the world’s largest manufacturer and out-produced the US by 28.2%. Previously, China’s manufacturing output exceed German’s factory output in 2000, and Japan’s output in 2006.
2. The U.S. is still a world leader in manufacturing and America’s factory output continues to increase, despite the rise of China to the world’s No. 1 manufacturer. The bottom chart above puts the enormous size of the U.S. manufacturing sector into perspective, by comparing America’s manufacturing output in 2012 ($1.993 trillion) to the combined manufacturing output of Germany, Korea, Italy, Russia, Brazil and India, which are the countries that are ranked No. 4 through No. 9 in 2012 for manufacturing output.
3. It’s also important to remember that China’s manufacturing workforce is estimated to be around 100 million and could be as high as 110 million, compared to America’s manufacturing employment of slightly more than 12 million. Therefore, even though China is producing more manufacturing output than the US, the productivity of American factory workers is so high compared to China, that China needs almost ten factory workers for every one American worker to produce 28% more output. On a per worker basis, the average American factory was responsible for $166,000 of output in 2012, while the average Chinese factory was responsible for less than $26,000 of manufacturing output; the productivity of American factory workers was more than six times that of the average worker in China.
4. Also noteworthy was the fact that South Korea produced more manufacturing output than Italy last for the first time ever, and moved ahead of Italy to become the world’s No. 5 largest manufacturing nation last. Also noteworthy: India’s factory output exceeded manufacturing production in France for the second straight year, which moved India into ninth place for both 2011 and 2012.