World Manufacturing Output Doubles Since 2004
March 27, 2018 •
World manufacturing output has exceeded $100 trillion since 2012, and stood at nearly $105 trillion in 2015, which is nearly double the output in 2004 ($55 trillion).1 However, for major manufacturing nations — including the United States, China, and Germany — manufacturing output, while generally growing, has generally declined or remained flat, as a percentage of national GDP during this period.
It is well known that in the past decade or so, there has been a dramatic rise in China’s manufacturing, whose output rapidly rose from less than half that of the United States’ to over 150 percent of U.S. production. Expressed another way, while China accounted for only 1.13 percent of global manufacturing in 2004 as compared with the United States’ 3 percent, by 2015, China represented 3.1 percent of that figure, with the U.S. share declining to 2.04 percent.
The importance of manufacturing, as expressed in percentage of GDP, has declined in many of the advanced nations, including the United States. Chinese manufacturing represented over 30 percent of the Chinese GDP until recently, although South Korean manufacturing has now equaled Chinese in its relative importance in the national economy. German manufacturing remains the strongest among the major non-Asian economies, with the German manufacturing sector accounting for over 20 percent of the German GDP. Notably, Brazil’s manufacturing sector’s importance has declined significantly, falling from nearly 18 percent of the Brazilian economy in 2004 to under 12 percent by 2016. The United States and United Kingdom have also seen some decline in manufacturing as a percentage of GDP, reflecting the increasing importance of the service sectors of those economies over the past decade and more. For example, although overall output grew significantly during this time, the U.S. manufacturing sector declined from approximately 16.6 percent of GDP to just over 12 percent of GDP in 2015).
Note that manufacturing as a percentage of national GDP does not accurately reflect the overall strength of the economy. For example, Swaziland has, by this metric, a stronger manufacturing sector than South Korea, and Afghanistan’s manufacturing sector is larger, by percentage of GDP, than the United States.
Contact ACA’s Allen Irish for more information.
1 World Bank statistics on manufacturing value added