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Manufacturing and Energy Sector, Manufacturing

Midwest states, Middle Atlantic, fabricated metal products, Important products, motor vehicles

The United States leads all nations in the value of its yearly manufacturing output. Manufacturing employs about one-sixth of the nation’s workers and accounts for 17 percent of annual GDP. In 1996 the total value added by manufacturing was $1.8 trillion. Value added is the price of finished goods minus the cost of the materials used to make them. Although manufacturing remains a key component of the U.S. economy, it has declined in relative importance since the late 1960s. From 1970 to 1995 the number of employees in manufacturing declined slightly from 20.7 million to 20.5 million, while the total U.S. labor force grew by more than 46.2 million people.

One of the most important changes in the pattern of U.S. industry in recent decades has been the growth of manufacturing in regions outside the Northeast and North Central regions. The nation’s industrial core first developed in the Northeast. This area still has the greatest number of industrial firms, but its share of these firms is smaller than in the past. In 1947 about 75 percent of the nation’s manufacturing employees lived in the 21 Northeast and Midwest states that extend from New England to Kansas. By the early 1990s, however, only about one-half of manufacturing employees resided in the same region. Since 1947, the South’s share of the nation’s manufacturing workers increased from 19 to 32 percent, and the West’s share grew from 7 to 18 percent.

In the North, manufacturing is centered in the Middle Atlantic and East North Central states, which accounted for 38 percent of the value added by all manufacturing in the United States in 1996. Located in this area are five of the top seven manufacturing statesa—New York, Ohio, Illinois, Pennsylvania, and Michigan—which together were responsible for approximately 27 percent of the value added by manufacturing in all states. Important products in this region include motor vehicles, fabricated metal products, and industrial equipment. New York, New Jersey, and Pennsylvania specialize in the production of machinery and chemicals. This area bore the brunt of the decline in manufacturing’s value of national output, losing a total of 800,000 jobs from the early 1980s to the early 1990s.

In the South the greatest gains in manufacturing have been in Texas. The most phenomenal growth in the West has been in California, which in the late 1990s was the leading manufacturing state, accounting for more than one-tenth of the annual value added by U.S. manufacturing. California dominates the Pacific region, which specializes in the production of transportation equipment, food products, and electrical and electronic equipment.

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