The Manufacturing Value Chain is Much Bigger than You Think!


The Manufacturers Alliance for Productivity and Innovation (MAPI) just released a study that shows that the effect of manufacturing on the U.S. economy is much larger than traditional measures indicate. Says MAPI:  “The traditional finding is that manufacturers’ proportion of gross domestic product (GDP) is only about 11% and manufacturing’s share of economy-wide full-time equivalent employment is just 9%. Since this excludes manufacturing activities such as research and development, corporate management, logistics operations, and advertising and branding, those figures are merely the tip of the iceberg. ” … manufacturing’s footprint is much larger than merely the value-added at the factory loading dock. Manufacturing plant activities lie near the center of a substantial and complex value chain that is composed of an upstream supply chain that gathers materials and services and a downstream sales chain that moves goods to market and sells and services goods. Manufactured goods are also intermediate inputs in nonmanufacturing industries’ supply chains.” MAPI finds:  “The manufactured goods value chain plus manufacturing for other industries’ supply chains accounts for about one-third of GDP and employment in the United States.  The domestic manufacturing value-added multiplier is 3.6, which is much higher than conventional calculations.”