Support for small to medium enterprises SMEs is also highlighted. This includes enhanced management development support and apprenticeship schemes to help boost the capacity of these firms. It also seeks to build up the level of innovation through the creation of advanced manufacturing clusters, networks and partnerships. This involves the modernisation of factories to include more technology-enabled smart manufacturing processes.
Finally, the report seeks an investment in transport, production and telecommunications infrastructure that is smart, sustainable and resilient. However, it employs around , people or 8. This is about five times more than the mining sector. The current outlook for resource sector investment is for this peak to occur around This has been forecast for some time although it has only recently made headlines due to its reporting by Deloitte Access Economics.
A more diversified economy is essential for the longer term, and manufacturing has an important role to play. As the United States has shown, the key to enhancing our manufacturing industries is to address a series of macro and micro level issues simultaneously. There must be greater assistance, particularly to SMEs, to help local manufacturers connect with global supply chains.
Education and training of the Australian workforce is also a critical area that requires future investment. Our universities and technical training colleges must be funded to provide best practice programs that can supply the future needs of industry. It must also become easier for manufacturers to connect with such institutions for research, education and training. Finally, there must be ongoing investment in our national infrastructure, in particular initiatives such as the National Broadband Network, and the application of environmentally sustainable technologies.
Portsmouth Climate Festival — Portsmouth, Portsmouth. Edition: Available editions United Kingdom. Become an author Sign up as a reader Sign in. This state of affairs can not go on forever; even Ben Bernanke, the Chairman of the Federal Reserve, has said so. Even though about two-thirds of most economies are composed of service industries, these service industries are dependent on manufactured goods for their operation and for their own technological progress.
For instance, the retail and warehousing industries, which comprise about 11 percent of American GNP value-added , are in the business of selling manufactured goods. The airline industry, the telecommunications industry, and the software industry depend on airplanes, phones and broadcast equipment, and computers for both their existence and for their technological progress. In the U. Manufacturing productivity, that is, the goods that are output from a specific amount of input, increases by about 3 percent each year in the U.
By contrast, service industries either have very slow productivity growth or depend, directly or indirectly, on technological progress in machinery. As a result, manufacturing productivity growth rates have been high for decades. Multifactor labor productivity growth averaged 3. This was nearly one-third greater than in the private, nonfarm economy as a whole. Given the nexus between research and development and manufacturing, a vital manufacturing sector plays an important role in maintaining an innovative economy.
Not only is manufacturing important for jobs and production, but a vital manufacturing sector is also essential to meeting national challenges, including rebuilding U. Renewable forms of energy, such as wind and solar power, rely on manufactured components more so than extractable energy such as oil. Finally, U. The principal causes of manufacturing job loss were growing trade deficits, especially with China, Mexico, and other low-wage nations, and also the Great Recession, which was followed by a weak recovery.
The Asian financial crisis of late caused the real, trade-weighted value of the U. What began with steady growth in U. Manufacturing employment declined continuously thereafter throughout the recovery that ended in December The Great Recession caused another collapse in manufacturing employment, followed by a relatively weak recovery since Between March and December , 3. Figure B Total U. Table 9 shows manufacturing jobs lost by state and jobs lost as a share of total state employment.
The states hardest hit by manufacturing job loss measured by share of state employment lost were North Carolina 9. Eight states have lost more than , manufacturing jobs since California , jobs lost, 4.
The Midwest and some southern states have been particularly hard hit by the collapse of manufacturing. Those states are also well positioned for a manufacturing recovery if the structural causes of the manufacturing decline are reversed, including the elimination of currency manipulation Scott b which would substantially reduce or eliminate the U. For the manufacturing sector, the last two business cycles have resulted in historically weak business cycle recoveries.
In all business cycles between World War II and the year , manufacturing had recovered at least 95 percent of prerecession employment within six and one-half years 26 quarters after the previous business cycle peak, as shown in Figure C. For all 10 previous postwar recoveries prior to the business cycle, the average employment recovery at this point was However, the recoveries of and lagged far behind all previous business cycles. When the recovery ended in , employment stood at only This is reflected in the steady decline in employment between and , as shown in Figure B earlier.
Note: The zero quarter represents the peak of prior business cycle as defined by the National Bureau of Economic Research. At the zero quarter, the manufacturing employment is indexed to one. The proceeding values therefore represent the percent change in manufacturing employment as the values enter recession and then the recovery. Manufacturing employment data are from the Bureau of Labor Statistics' Current Employment Statistics public data series.
The Great Recession was unusual both because of the length and depth of the manufacturing employment decline. Employment in the most recent period the third quarter of quarter reached only If employment had recovered to the level of the average postwar recovery, then an additional 1. The weak manufacturing recovery is a product of both international and domestic challenges that the manufacturing sector faces.
Measured as a share of GDP, the manufactured goods trade deficit increased by 0. Currency manipulation by China, Japan, and other countries is one of the leading causes of growing U. More than six and one-half years after the start of the Great Recession, unemployment remained well above prerecession levels, and the United States had a jobs shortfall the number of jobs needed to keep up with growth in the potential labor force of nearly 6 million Economic Policy Institute , and Bivens and Shierholz, Elimination of currency manipulation by a group of about 20 countries, with China as the linchpin, could reduce the U.
This would increase U. GDP by between 2. Approximately 40 percent of the jobs gained would be in manufacturing, which would gain between , and 2. The manufacturing sector has struggled to expand as the United States has become more integrated into the global marketplace. A lack of supportive U.
The sector is poised to play a key role in reducing greenhouse gas emissions and the reliance on imported energy, but new policies are also needed to achieve progress in these areas.
The United States must develop a comprehensive set of transportation and energy policies to increase energy efficiency and renewable energy production in order to take full advantage of the new opportunities. The manufacturing sector is also of vital importance in maintaining our innovative capacity. Reinvestment in U. Robert E. Scott joined the Economic Policy Institute in and is currently director of trade and manufacturing policy research.
His areas of research include international economics, trade and manufacturing policies and their impacts on working people in the United States and other countries, the economic impacts of foreign investment, and the macroeconomic effects of trade and capital flows. He has a Ph. This research was made possible by support from the Alliance for American Manufacturing. Based on state GDP estimates, as reported in Table 5. Gross output measures are depressed during recessions by inventory accumulation, as shipments decline faster than output value added.
The manufacturing share of total gross output in all industries was Total gross output double-counts the output of many industries. For example, purchased services and commodities consumed by manufacturing are part of the gross output of those industries, as well as the manufacturing sector.
In addition, a share of gross manufacturing output is also part of the gross output of other sectors for example, trucks and tractors consumed by the agriculture and transportation industries. The true economic impact of manufacturing likely falls between its share of gross output The value added data shown in Figure A are based on national estimates of value added in manufacturing. In , manufacturing had a slightly smaller share of national GDP Estimates of total employment supported by U.
Using pooled — data, Scott , Table 1 at 6 found that Thus the non-college share in manufacturing was Census Bureau, various years. Wages for workers surveyed in were inflation adjusted for comparison with data.
Bivens, Josh. Updated Employment Multipliers for the U.
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