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MANUFACTURING

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Input: Economic Factors

Between 1992 and 2002, the Manufacturing sector was the largest contributor to the U.S economy, accounting for 22% of the total rise in real Gross Domestic Product (GDP). The 7% decline in the Manufacturing sector during the current recession decreased the GDP growth rate to a lower 0.3%. In fact , the importance of the Manufacturing sector in the country's economic growth is pronounced by the sheer size of its multiplier effect. According to the National Association of Manufacturers, every $1 of a manufacturing product sold to a final user generates an additional $1.43 of intermediate economic output, more than half in sectors outside manufacturing. Every $1 million in final sales of manufactured products supports eight jobs in the Manufacturing sector and an additional six jobs in other sectors.

Market forces, including global competition, structural changes, and emerging threats may affect levels of resources available for occupational safety and health initiatives within the Manufacturing sector.

Across the Sector

The Manufacturing sector is extremely broad, and includes nearly 500 six-digit North American Industry Classification System (NAICS) codes. The activities within the Manufacturing sector range from food and textile processing and production, to metals processing and heavy equipment production, to oil refining and chemical production. Processes can range from production of bulk materials like minerals, metals, and chemicals, to the production of small or intricate items such as electronics, specialty chemicals, or nanoparticles. Because of this diversity, sweeping assessments of the Manufacturing sector are difficult. However, a several observations will apply to many segments within the Manufacturing sector:

  • Today's global economy is presenting businesses with competition from new, and for some firms, unexpected quarters. Pressures on both productivity and wages are being felt from operations outside of the United States.
  • Due to global competition is the move by many companies toward lean manufacturing. Lean manufacturing has the effect of making major structural changes in the design and production of products. Its goals are to reduce waste and production time, while increasing quality, all leading to reduced costs. While the concepts of lean manufacturing have been used for decades, major increases in worker productivity in recent years can be traced to widespread adoption of these practices.

Natural and man-made emergencies are a threat to the safety and security of nearly all operations within the sector:

  • For all manufacturing facilities, pre-planning is critical to protecting employees and the surrounding communities, and ensuring safe and continued site operation.
  • Many industries, such as those using large quantities of hazardous materials, are taking additional measures to protect goods and personnel from security threats.
  • The costs of intensive security measures reduce profit margins, and some of these costs will be passed on to consumers.
  • Increased spending for protective measures means that businesses will have to cut spending elsewhere. Spending on other aspects of worker safety and health may be reduced.

New technologies can affect occupational safety and health and may also have an economic impact:

  • Adoption of new technologies may benefit productivity, but new technologies can bring unanticipated safety and health risks.
  • Businesses may feel pressure to adopt new technologies as their competitors adopt them.
  • Decisions to implement technologies to benefit worker safety and health are typically weighed against other cost pressures.
Manufacturing sector Statistics

The Manufacturing sector is among the largest sectors in terms of annual sales receipt or shipments, annual payroll and paid employees. According to the 2002 Economic Census, manufacturing represents only 5% of the firms in the United States, but is responsible for 18% of the total sales or shipments, 15% of the total U.S. annual payroll, and 13% of the U.S. country's workforce. However, these percentages are down from the 1997 Economic Census where manufacturing represented 6% of the firms in the United States, and was responsible for 22% of the total sales or shipments, 20% of the total annual payroll, and 17% of the U.S. workforce.

Manufacturing Industry Groups

While the Manufacturing sector is categorized by 473 different six-digit NAICS codes, these industry segments are grouped and described by 21 three-digit NAICS codes. The groups, along with the number of establishments, number of employees, and the annual payroll in each group, are listed below.

Selected economic data for Manufacturing sector Groups

3-Digit NAICS Code Manufacturing Group Number of Establishments Number of Employees Annual Payroll ($1000)
311 Food Manufacturing 27,915 1,506,932 45,519,634
312 Beverage & Tobacco Product Manufacturing 3,025 160,305 6,923,024
313 Textile Mills 3,932 269,064 7,666,079
314 Textile Product Mills 7,304 183,333 4,759,988
315 Apparel Manufacturing 13,038 343,450 7,454,143
316 Leather & Allied Product Manufacturing 1,522 44,543 1,160,833
321 Wood Product Manufacturing 17,202 540,565 16,051,554
322 Paper Manufacturing 5,520 491,436 21,497,243
323 Printing & Related Support Activities 37,528 715,777 25,627,770
324 Petroleum & Coal Products Manufacturing 2,262 102,836 6,151,468
325 Chemical Manufacturing 13,476 852,297 44,556,764
326 Plastics & Rubber Products Manufacturing 15,529 983,757 32,619,736
327 Nonmetallic Mineral Product Manufacturing 16,706 483,161 17,929,311
331 Primary Metal Manufacturing 5,194 490,417 21,399,636
332 Fabricated Metal Product Manufacturing 62,219 1,574,827 57,534,861
333 Machinery Manufacturing 28,306 1,172,889 49,838,051
334 Computer & Electronic Product Manufacturing 15,910 1,262,063 64,562,501
335 Electrical Equipment, Appliance, & Component Mfg. 6,499 494,370 18,082,952
336 Transportation Equipment Manufacturing 12,639 1,676,198 82,067,852
337 Furniture & Related Product Manufacturing 22,523 595,915 17,400,405
339 Miscellaneous Manufacturing 32,569 755,401 27,636,736

A closer look at the economic impact of these manufacturing groups shows that several have significantly higher wages than average for all sectors. For example, Transportation Equipment Manufacturing, NAICS code 336, has 0.18% of all establishments in the United States but employs 1.54% of all U.S. workers and represents 2.20% of the annual payroll. Data for the other manufacturing industry groups are given below.

Selected economic contributions of the Manufacturing sector Groups

3-Digit NAICS Code Manufacturing Group Percent of All Sector Establishments Percent of All Sector Employees Percent of All Sector Annual Payroll
311 Food Manufacturing 0.41% 1.38% 1.22%
312 Beverage & Tobacco Product Manufacturing 0.04% 0.15% 0.19%
313 Textile Mills 0.06% 0.25% 0.21%
314 Textile Product Mills 0.11% 0.17% 0.13%
315 Apparel Manufacturing 0.19% 0.32% 0.20%
316 Leather & Allied Product Manufacturing 0.02% 0.04% 0.03%
321 Wood Product Manufacturing 0.25% 0.50% 0.43%
322 Paper Manufacturing 0.08% 0.45% 0.58%
323 Printing & Related Support Activities 0.54% 0.66% 0.69%
324 Petroleum & Coal Products Manufacturing 0.03% 0.09% 0.17%
325 Chemical Manufacturing 0.20% 0.78% 1.20%
326 Plastics & Rubber Products Manufacturing 0.23% 0.90% 0.88%
327 Nonmetallic Mineral Product Manufacturing 0.24% 0.44% 0.48%
331 Primary Metal Manufacturing 0.08% 0.45% 0.57%
332 Fabricated Metal Product Manufacturing 0.90% 1.44% 1.54%
333 Machinery Manufacturing 0.41% 1.08% 1.34%
334 Computer & Electronic Product Manufacturing 0.23% 1.16% 1.73%
335 Electrical Equipment, Appliance, & Component Mfg. 0.09% 0.45% 0.49%
336 Transportation Equipment Manufacturing 0.18% 1.54% 2.20%
337 Furniture & Related Product Manufacturing 0.33% 0.55% 0.47%
339 Miscellaneous Manufacturing 0.47% 0.69% 0.73%
31-33 All Manufacturing 5% 13% 15%

Sources

National Association of Manufacturers ( NAM )

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