Economic Outlook n° 1187 | Special Report | The Reindustrialization of the United States
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▶ Broad improvement of the manufacturing sector
As shown in Figure 10, while manufacturing pro- duction is still 4.5% below its 2007 peak, it steadily rebounded during 2010 and 2011, and continued to grow in the first half 2012. Manufacturing producti- vity has dramatically improved over the last decade (+45% in the first half of 2012 compared to 2000) despite slowing somewhat during the recession. This improvement in productivity is a result of a 6% increase in output from 2000 to 2012, while the workforce shrunk by more than 30% over the same period. U.S. manufacturing operating profitability bounced back dramatically in 2010/2011, and has so far stabilized at the highest level in a decade despite previous periods of more robust economic growth. Unit labor costs in manufacturing have fallen below their 2000 level, with much of the downturn coming after the recession. Manufacturing employment bot- tomed out in 2010 and has started to slowly regain ground after two decades of deterioration. Exports of manufactured goods have jumped for much of the last decade and displayed record growth in 2010 into 2011.▣
The guest stars of reindustrialization
▶ The “shining” manufacturing sectors during the 2010/2011 rebound and afterward U.S. manufacturing has continued along the path begun in the previous decade and the aforementio- ned leading sectors have played a crucial role in the dramatic 2010 and 2011 growth. Let’s consider more precisely the underlying factors which contributed to these improvements amid the most buoyant sectors.
▶ Computer and electronic products manufacturing This sector has retained its leadership and even strengthened its weight within the U.S. manufactu- ring sector during the last decade. For the last three years, two segments have especially outperformed, demonstrated by current outputs higher than their pre-recession levels:
10. Manufacturing production Index basis 100 =2000
200 Exports Productivity
Operating profitability Unit labor cost
150
Production Employment
> Semiconductor and other electronic equipment manufacturing has proven to be a powerful engine of growth as its output skyrocketed more than four- fold between 2000 and 2012. For the last five years (except for 2009), the sharp expansion of new mar- kets fuelled by the emergence of electronic devices, such as smartphones, tablets, e-readers, has conti- nued to drive production (+32.7% and +12.0% in 2010 and 2011 respectively). Nevertheless, 2012 has seen a slowdown caused by less favorable sector and economic environments. > Navigational, measuring, electro medical and control instruments manufacturing also helped the sector expand during the last decade and rebound in the wake of the crisis. While shrinking in 2009, the segment posted 6.5% and nearly 11% growth in 2010 and 2011 respectively. Boosted by its markets (aero- space, automotive, machinery, semiconductor manufacturing), 2012 has also seen a fairly robust increase for this subsector.
100 50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Sources: Bureau of Economic Analysis – Federal Reserve Bank – Bureau of Labor Statistics 14
Another notable segment, computer and peripheral equipment production hit a landmark in 2008, punc- tuating a six year increase with an all-time high. But since then, lackluster PC and notebook sales contrac-