SCDigest Editorial Staff
Does the perception of American manufacturing differ from reality?
As we reported last week, research firm Global Insight recently updated its numbers, and predicted that in 2009 the US would lose its position as the world’s top manufacturer for the first time in more than 100 years, moving forward the 2013 date the firm had predicted just last spring as the year for that switch. (See For First Time in More than 100 Years, US Set to Lose Place as Largest Manufacturer in the World.)
But the US-based National Association of Manufacturers says those numbers are all wrong.
“I and members of the National Association of Manufacturers strongly disagree with this prediction,” says John Engler, president of NAM.
Engler says the Global Insight numbers are inconsistent with data from the World Bank and other sources. Better adjusting for prices seems to be a key factor, which Engler says better reflects the true quantity of output.
Based on that data, Engler says “The US remains by far the world’s largest manufacturer, producing nearly one-fourth of the world’s industrial output. Based on the highly respected World Bank database, our analysis also shows that we will produce twice as much this year as the fourth placed economy, China.” The European Union and Japan rank second and third in this analysis.
He adds that even in current measures of manufacturing denominated in dollars (which inflate China’s position because of the rising yuan and other factors), China will produce only about 60% as much as the US in 2008.
Engler further says that even if China continues its rapid economic growth of about 10% per year, it will take until 2020 at the earliest for China to catch the US.
“Given the constraints China is beginning to face, its ability to maintain that torrid growth is highly questionable,” Engler added. Any slowdown in China’s growth could push the date China becomes number 1 well out into the future.
(Manufacturing Article - Continued Below)