U.S. manufacturing is not in decline; it is thriving. By historic standards and relative to other countries’ manufacturing sectors, U.S. manufacturing is firing on all cylinders. In 2006, the sector achieved record output, record sales, record profits, record profit rates and record return on investment. American manufacturing performance has never been stronger.
The Federal Reserve recently released its monthly report on industrial production, which found that U.S. manufacturing output has continued to rise throughout 2007. U.S. factories remain the world’s most prolific, accounting for more than 20 percent of the world’s manufacturing value added. By comparison, Chinese plants account for about 8 percent. Thus, for every dollar of product made in China, U.S. factories produce $2.50 of output.
And not only is manufacturing thriving, it is thriving in large measure because of international trade. Both manufacturing exports and imports hit records in 2006.
The much larger threat to manufacturing is the proclivity of meddling policy‐makers to fix what ain’t broke. Spreading myths about the precariousness of U.S. manufacturing and laying the blame on trade policy may score political points with the unions. But if Congress passes legislation that compromises the access of U.S. producers to international markets, there will be real problems to solve.
Read the rest at freetrade.org.