Study: US Manufacturing, Logistics Grew Dramatically Over Last Generation

Production Has Grown 11 Percent Since the Early 2000s

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• 2017 looks to be a new record year for manufacturing and logistics.
• Since 1979, the US lost 7.5 million manufacturing jobs but gained nine million in trade, transportation, and utilities.
• Report: “We are at peak US employment right now.”

Contrary to public perception, US manufacturing and logistics industries experienced dramatic growth over the past generation, says a new report from Ball State University.
US manufacturing production has grown 11 percent since the dot.com bust of the early 2000s and the ensuing economic turbulence of the 2001 and 2007-2009 recessions, according to the report entitled “Manufacturing and Logistics: A Generation of Volatility & Growth,” released by the Center for Business and Economic Research (CBER) at Ball State and Conexus Indiana.
“According to folklore, this has been a terrible generation for manufacturing and those who move goods,” said CBER director Michael Hicks, George and Frances Ball Distinguished Professor of Economics and Business Research. “That isn’t really what the data says. Indeed, 2015 was a record manufacturing production year in inflation-adjusted dollars. While 2016 fell just short with some weakness in the first and second quarter, 2017 looks to be a new record year.

“Most of the confusion about manufacturing and logistics is due to declining employment over the past generation,” Hicks added. “The fact is, manufacturing firms have become very lean, and productivity growth means more goods produced with fewer workers.”

Three factors contribute to a decline in employment: the workforce is better educated and trained, increasing productivity; mechanization has displaced some workers; and improved processes, such Lean Six Sigma and other management methods, have increased manufacturing production, according to the study’s authors.
Since peak manufacturing employment in 1979, the United States has lost approximately 7.5 million manufacturing jobs but gained more than nine million jobs in trade, transportation and utilities, the broadest measure of the logistics industry.
“Trade and productivity growth shifts job opportunities to other places and other sectors even as employment grows,” Hicks said. “We are at peak US employment right now.”