Manufacturing's U.S. Economic Share Continues To Decline

June 9, 2006
While mining and construction, the other two major components of the goods-producing sector of the U.S. economy, account for slightly larger shares of GDP than they did 10 years ago, manufacturing's share is smaller. In 1995, manufacturing accounted ...

While mining and construction, the other two major components of the goods-producing sector of the U.S. economy, account for slightly larger shares of GDP than they did 10 years ago, manufacturing's share is smaller.

In 1995, manufacturing accounted for 15.9% of the overall economy; last year it accounted for just 12% of GDP, says Daniel J. Meckstroth, chief economist at the Manufacturers Alliance/MAPI, an Arlington, Va.-based business and public policy research group. He's been running the GDP numbers, using recently released U.S. Commerce Department data for 1947 through 2005.

Within manufacturing, both durables and non-durables declined over the decade as a share of GDP. Manufacturing of durables, generally big-ticket items like autos, airplanes and appliances that are designed to last at least three years, fell to 7% of GDP in 2005 from 9.2% in 1995. Manufacturing of non-durables fell to 5% of GDP from 6.7%.

Within the goods-producing sector of the economy, mining's share of GDP increased to 1.7% from 1% during the decade, and construction's share of GDP increased to 4.8% from 3.9%.

Not surprisingly, the service sector of the U.S. economy grew even bigger during the decade, rising to 80.6% of GDP in 2005 from 78% in 1995.

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