Manufacturing Sector Trend Analysis

My assignment was to analyze the current state of the manufacturing sector in the United States, paying particular attention to trends in productivity, competitiveness, and employment. What I learned was a bit surprising and alarming, though, only if said trends continue.

With regard to productivity, in an article released by the Manufacturers Alliance for Productivity and Innovation, productivity in the manufacturing sector declined by 0.1% in Q3 2013, as hours worked increased by 1.2%. That said, productivity in durable goods increased 1.1% and decreased 1% in nondurable goods.

It was the area of competitiveness that was most interesting to me. According to a 2013 report released by Deloitte, evaluating global manufacturing competitiveness, the United States did not hold the top position. As was described in that article, of the top ten countries, five are developed nations whereas five are developing nations and yet, in five years, three developing nations will likely occupy position #2 and #3 respectively. The article points to “talent-driven innovation” as the key component to a nations competitiveness. In fact, the Deloitte article goes on to state:

“Talent-driven innovation is deemed the most critical driver of a nation’s competitiveness. Catapulting into the second most important driver position is the economic, trade, financial, and tax system of a nation.” (Deloitte 2013)

Current competitiveness | | Competitiveness in five years | Rank | Country | Index score (10=High 1=Low) | | Rank | Country | Index score (10=High 1=Low) | 1 | China | 10.00 | | 1 | China | 10.00 | 2 | Germany | 7.98 | | 2 | India | 8.49 | 3 | USA | 7.84 | | 3 | Brazil | 7.89 | 4 | India | 7.65 | | 4 | Germany | 7.82 | 5 | S. Korea | 7.59 | | 5 | USA | 7.69 | 6 | Taiwan | 7.57 | | 6 | S. Korea | 7.63 | 7 |