Manufacturing still matters

By 2015, the U.S. [manufacturing] share had risen to about 36 percent. The shares of Mexico and South Korea had risen slightly and Germany’s share hadn’t changed much. All other OECD countries saw their share of manufacturing output decline, with Japan’s share declining nearly 3 percentage points. By this standard, U.S. manufacturing is competing well against the manufacturing sectors of other large, developed countries.

[…] trade and technology can interact with different parts of manufacturing in very different ways. Manufacturing firms that adopt specific technologies, such as computers or industrial robots, are significantly different from those that do not: in particular, they are larger and more productive upon adoption. Importing is associated with different outcomes at the firm and industry levels: while exposure to greater import competition is associated with employment decline, firms increasing their use of imported goods conditional on such exposure can exhibit employment gains.

[industrial output] is below the peak from the previous recession. We were talking about this with Tom Palley, and it is clear to me that this statistics played an important role in the rise of left (Bernie) and right-wing (Trump) populism in the US. The failure of the Obama recovery to lift manufacturing, not just jobs, but output too is central to any political economy story about the last election.