US Manufacturing Sector
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 286,493 manufacturing establishments in the US produce goods for direct consumption and use in manufacturing other products. Manufacturing operations use machinery, computer systems, and workers to form, modify, assemble, test, and package goods. Major customers include other manufacturers, distributors and wholesalers, retailers, exporters, and end-consumers.
Competition From China
US manufacturers compete for market share domestically and internationally with producers in other nations – most notably China.
Environmental Regulation Tightens
Manufacturers are required to meet environmental regulations to protect air, water, and soil.
Industry size & Structure
The manufacturing sector is comprised of about 286,493 establishments that employ 12.9 million workers and generate $7.1 trillion in annual revenue, according to government sources.
- The manufacturing sector represents 10.3% of US Gross Domestic Product (GDP) and employs 8.3% of the nation's workers.
- The sector is fragmented, with the 20 largest manufacturing firms representing just 18% of revenue
- In addition to employer establishments, the manufacturing sector has 354,200 owner-operated establishments with no employees. Subsectors with the highest numbers of nonemployer establishments are food (14.3%); fabricated metal (11.3%); printing (7.9%); apparel (7.4%); and wood products (7.2%). The owners of nonemployer firms typically perform the work and may outsource support functions like marketing and accounting.
- The manufacturing sector added about 14,350 establishments in 2022, which equals about 5% of existing establishments, according to the Bureau of Labor Statistics.
- The manufacturing sector is forecast to shrink its employment base by 0.3% overall in 2021-2031, which is much lower than the national average growth of 5.3% for all jobs, according to the Bureau of Labor Statistics.
- Transportation equipment manufacturing is the largest manufacturing industry in the nation and 16 states, while food manufacturing leads in 19 states and the District of Columbia.
Industry Forecast
US Manufacturing Sector Industry Growth
Recent Developments
Nov 20, 2024 - New High for Wages
- Employment by manufacturing companies was relatively unchanged in September compared to a year ago, extending to over two years a trend of relatively stable employment by the sector, according to the latest US Bureau of Labor Statistics data. By comparison, wages at manufacturing companies continued their steady climb, rising 5.6% year over year in October to a new high of $28.17 per hour, BLS data shows. New orders for durable and nondurable goods rose 1.3% and 3%, respectively, in July year over year, amid rising shipments of manufactured goods over the same period. Notably, shipments of manufactured durable goods rose to a new high in July, up 2.8% YoY and 1.1% versus the previous month, according to the Census Bureau.
- US manufacturers have much to lose if a trade war erupts between the US and its largest trading partner Mexico, The New York Times reports. During his campaign, President-elect Donald Trump vowed to slap 25% tariffs (or higher) on all goods from Mexico unless it stopped the flow of migrants and drugs to the US. While Mexico depends heavily on trade with the US – exporting some 80% of its goods to America – it accounted for nearly 16% of overall US exports in 2022, according to the Office of the US Trade Representative. Tariffs on Mexico and China, another Trump target, would have widespread ramifications for manufacturers, making it more expensive to produce goods that use foreign components. And if other countries respond with retaliatory tariffs, it could also make it more expensive for manufacturers to export goods to foreign markets, according to Manufacturing Dive.
- Declining orders and production at US factories and recovery in the labor market is leaving less work for robots, The Wall Street Journal reported in October. According to the Association for Advancing Automation, orders for factory robots in North America plunged by nearly one-third in 2023 from 2022’s record volume and orders continued to slide during the first six months of this year. The pandemic-induced surge in demand for robots – driven by a shortage of factory labor and rising production as the economy reopened – has fallen steeply as manufacturers cut back on purchases of automation equipment, manufacturing executives told WSJ. The slowdown in electric vehicles production amid soft sales has also cooled demand for robots. US industrial production and manufacturing output declined in September, according to the Federal Reserve, while capacity utilization at US factories stood at 77.5%, compared with August's 77.8%.
- As rising temperatures make it more difficult to cool factory floors, companies are turning to new technologies to protect workers, The Wall Street Journal reports. According to the nonprofit Public Citizen, over 13 million US workers are exposed to extreme heat. To protect employees from heat stress and dehydration and keep them on the job, some companies are adopting mobile apps, wearable devices, apparel made with cooling fabrics, and machines that distribute cool air indoors more effectively, according to WSJ. Beyond traditional air conditions that cool and dehumidify the air, GE Appliances has installed high-tech air handlers at several plants. The new air handlers, manufactured by Trane Technologies and deployed in several locations on the factory floor, distribute the air more evenly and powerfully. Hiring and retention “dramatically improved” after the air handlers were installed, says GE Appliances’ VP of supply chain Bill Good.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.