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
Mar 20, 2025 - Employment and New Orders Falling
- Employment by manufacturing companies fell 0.7% in February compared to a year ago, while average sector wages rose 4.9% over the same period to a new high of $28.62 per hour, according to the latest US Bureau of Labor Statistics data. Average wages paid by US manufacturers are trending steadily upward and have risen more than 20% since December 2020. While manufacturing wage inflation shows no signs of slowing, job growth has cooled amid a slowdown in factory activity. New orders for manufactured goods fell 1.9% year over year in November, with durable goods orders down 5.3% and orders for nondurables down 1.5%, according to Census Bureau figures.
- Shop class is being revamped to teach today’s students the technical skills required to fill the US manufacturing labor gap, which could swell to as many as 3.8 million workers by 2033, according to a report from Deloitte and the Manufacturing Institute. Leading-edge school districts are investing tens of millions of dollars to update and expand high-school shop classes for the 21st century, The Wall Street Journal reports. Vocational classes are preparing students for careers in the trades by working with wood, metals and machinery as hands-on skills stage a comeback amid high college costs and AI's threat to white collar jobs. Cutting-edge facilities – outfitted with computer-controlled machine tools and robotic arms – are attracting students at a suburban high school in Wisconsin, where about a quarter of its 2,300 students have signed up for at least one of the courses in construction, manufacturing, or woodworking, WSJ reports.
- President Trump’s imposition of 25% tariffs on US imports of steel and aluminum and a blanket 10% tariff on imports from China are forcing US manufacturers to rethink their supply chains. The duties could mean higher prices for finished goods in the US and make it more expensive for manufacturers to import needed components and raw materials, particularly from China. The manufacturing industries expected to bear the brunt of the new metal tariffs include makers of cars and trucks, appliances, and construction equipment, The New York Times reports. Companies that need special alloys that aren’t available in the US will also be forced to pay more. Beer and soft drink manufacturers, both heavy consumers of aluminum for beverage cans, also face higher input costs. Citing data from the American Beverage Association, NYTs reports that in 2018, when tariffs on aluminum were set at 10%, they added half a billion dollars to production costs.
- President Donald Trump's tariffs threats, if realized, could worsen the existing labor shortage in the US manufacturing sector, Inc reported in December. If, as the president has suggested, 25% tariffs on exports from Mexico, Canada, the European Union, and other US trading partners, result in largescale reshoring of jobs to the US, it would add to the tally of US factory jobs that currently go unfilled. According to data cited by The Wall Street Journal, the number of available manufacturing jobs that went unfilled each month held steady at about 100,000 throughout 2024. Moreover, the domestic labor pool may not be able to fill millions of new positions expected to be created in the next few years, Inc writes. Trump’s promise to deport undocumented workers and restrict immigration would only exacerbate the current labor shortage, some business owners say.
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