Why Is American Manufacturing So Important?

The breakdowns in the supply chain caused by the COVID-19 pandemic have renewed interest in Made in the USA products. Most American consumers surveyed in 2017 responded that buying American-made products was at least somewhat, if not very, important, but they also indicated an unwillingness to spend more on domestic products.

However, COVID-19 shed a harsh light on how much Americans depend on overseas manufacturing – a dependence that now comes at a very high cost. As of July 2020, many American companies are now struggling with delayed shipping, increased costs and difficulties with product sourcing due to their reliance on imported goods. These problems get passed on to American consumers.

By contrast, companies that heavily invest in domestic products have had fewer supply chain disruptions, and the customers they serve have felt the effects far less.

When you look for the Made in the USA label, do you really know what you’re getting? Yes, you are supporting job and economic growth – and a more reliable supply chain – in addition to getting high-quality products. But there is more to it than that.

Innovation

U.S. manufacturers are the largest driver of innovation in the nation. The Bureau for Economic Analysis reported that American manufacturers performed 63 percent of all private sector research and development. As of 2018, the pharmaceuticals industry led the way in research and development, but significant contributions were also made in automotive and parts, aerospace, chemicals, computers and electronics.

When you buy Made in the USA products, you are supporting American innovators.

Jobs and the Economy

According to the Manufacturers Alliance for Productivity and Innovation (MAPI), manufacturing’s value chain accounts for about one-third of the United States’ gross domestic product and employment. For every dollar of domestic manufacturing, another $3.60 in added value is generated elsewhere. And for each job in manufacturing, 3.4 jobs are created in other industries. The National Association of Manufacturers calculated in 2018 that for every dollar spent in manufacturing, another $2.74 is added to the economy.

When you buy Made in the USA products, you are supporting jobs and the economy – not just in manufacturing.

Recovery

The American Society of Mechanical Engineers reported in 2019 that U.S. manufacturing output was $2.4 billion, second only to China and 2.5 times more than Germany and Japan combined. It should be noted that COVID-19 has caused a significant decline in this output, since many manufacturers had to slow or cease operations to comply with state mandates. Data from the Federal Reserve shows a 13.7 percent decline in output in April 2020, the sharpest drop in more than a century, but many industries are now on a slow road to recovery.

When you buy Made in the USA products, you are supporting the recovery of manufacturing, which also means economic and job recovery.

So, what does the future look like for U.S. manufacturing? Since we don’t know the duration or long-term impact of COVID-19, it’s hard to say. However, a recent MAPI report suggests the trend in the next year or so will be for more supply chains and production capacity to shift to domestic locations. Additionally, a projected 4.6 million manufacturing jobs will likely be needed over the next decade, although a persistent skills shortage will prevent about 2.4 million of those jobs from being filled.

Whatever happens, buying products Made in the USA can only be good for American manufacturers and for America’s future. Made in America matters now more than ever.

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