The Manufacturing Rebound is a Myth
Sunday, May 22, 2011
Talk of a manufacturing revival is in the air. America has, in fact, gained a quarter-million industrial jobs since the start of 2010. Unfortunately, this is less than 15 percent of the number lost during the recession. Furthermore, after this teasing uptick, U.S. manufacturing output seems to be stalling again. So, it is worth revisiting a much-denied fact I have written about before here and here: American manufacturing is in a state of profound crisis.
To get past the slew of analysis out there claiming everything is fine, it is crucial to understand why the usually quoted statistics that seem to show that American manufacturing is healthy are wrong.
First off, looking at aggregate manufacturing output, as most of these analyses do, obscures the fact that total output has only been stable (or close to it) because of a few sectors which have grown enormously. The rest of the manufacturing economy has been declining. According to a recent report from the Information Technology and Innovation Foundation: