U.S. Exports Would Rank #8 for Largest Economy
In 2008, the U.S. exported $1.276 trillion (or $1,276 billion, BEA data here) of manufactured goods to the rest of the world including food products ($89 billion), industrial supplies and materials ($780 billion), capital goods ($454 billion), automotive vehicles and parts ($234 billion), and consumer goods ($482 billion). If the value of U.S. exports ($1.276 trillion) in 2008 were considered as a separate country, it would have been the 12th largest country in the world, larger than the entire GDP of either India ($1.2 trillion, IMF data here) or Mexico ($1.1 trillion), and just slightly smaller than the entire GDP of Brazil ($1.57 trillion) and Canada ($1.5 trillion).If we add services and consider the total value of U.S. exports ($1.826 trillion), it would have been the 8th largest economy in the world for 2008, larger than the GDP of either Russia ($1.7 trillion) or Spain ($1.6 trillion), and ranking right behind the GDP of the U.K. ($2.7 trillion) and Italy ($2.3 trillion).
MP: We hear a lot about how the U.S. "doesn't make anything anymore" and how we have outsourced our manufacturing to China, etc. The U.S. export data for U.S. manufactured goods suggest otherwise - the U.S. manufacturing sector is alive and well, and according to many recent economic reports (ISM, vehicle production, industrial production, Empire State survey, manufacturing jobs in January, manufacturing overtime hours, etc.) the manufacturing sector is coming back.
See related Enterprise post "Manufacturing’s Death Greatly Exaggerated." Also note that U.S. exports dropped by about 15% in 2009, and imports by 23%, both due to the global slowdown.
21 Comments:
U.S. export growth added .5% to GDP in Dec. 2009. Export growth could be the driver for U.S. GDP growth (ex healtcare) for the near future. What will drive exports? High Tech or Intellectural Property laden goods and services.
Problems for future growth or maintaining status quo for U.S. Goods and Services in foreign economies:
Non-tariff barrier schemes such as ever changing certification standards.
Lenghty certification proceedings that are a front for capturing tech in products and stymie foreign competitors.
Intellectural Property theft and the un-official tolerance of black markets for stolen property.
Foreign countries holding competitions for companies hoping to do business in that market. The emphasis is on in-country manufacture with resultant tech transfer.
Google's problems in China in "competition" with Baidu are a case in point. Baidu gained much of its dominant position over Google in China because Google refused to supply illegal mp3 downoload sites in China.
The usual suspects are very quiet, go figure. Obviously evidence is stronger than BS.
The effect you discuss sounds very similar to what happened in agriculture - with massive advances in technology, very few people can produce very much. You don't hear many bemoaning the fact that there are very few farming jobs anymore.
Thank you for trying to get the word out that U.S. manufacturing is hardly dead. To hear the populists tell it, we don't produce anything any more and all the jobs have gone to China. Comparatively few jobs have gone to China, most have been lost due to productivity gains and recession. Unions don't help either.
So, where does U.S. manufacturing as a whole compare to other countries? Also, I would love to see a chart of total U.S. exports versus other countries - are we still one of the world's leading exporters overall?
Sorry, you already answered my question in another post - the U.S. is still the largest manufacturer in the world. Not surprised.
http://mjperry.blogspot.com/2009/12/us-remains-largest-manufacturer-in.html
Now take those GDP figures and make them per capita, Einstein!
Also, the U.S. produces a great deal in residential and commercial real estate, along with over $300 billion a year in home improvements, which aren't exported.
Is your "output for manufacturing worker" a true value-added number, or does it include the value of imported components & materials. For example, if a washing machine factory employed 500 workers for final assembly and 500 more for component fabrication...and the 500 fab guys are fired and replaced by imported components..then will your "output per worker" double?
From the BEA report: "The goods and services deficit was $380.7 billion in
2009, down from $695.9 billion in 2008. As a percentage of
U.S. gross domestic product, the goods and services deficit
was 2.7 percent in 2009, down from 4.8 percent in 2008.
If the U.S. had no trade deficit or even a surplus then $380.7 billion would have been added to the economy and 4.8% to GDP at the very least. That's millions of jobs and tax funding for the Treasury. That is for Goods and Services and would be considerably more if the energy trade deficit could be eliminated.
This is not the last century and economic recessions are very much harder to recover from. Is there any common sense and toughness in the population to overcome this?
Yeah, but the US was the world's largest exporter of goods thirty years ago.
Gettingrational, countries should be exchanging goods. However, if a country decides to exchange its goods for worth less U.S. paper assets, then that's good for the U.S. The best outcome is the U.S. never exports those goods.
Also, if you don't believe me, perhaps you'll believe Milton Friedman:
In his view, the "worst case scenario" of the currency never returning to the country of origin was actually the best possible outcome: the country actually purchased its goods by exchanging them for pieces of cheaply-made paper. As Friedman put it, this would be the same result as if the exporting country burned the dollars it earned, never returning it to market circulation.
@ Peak Trader wrote " However, if a country decides to exchange its goods for worth less U.S. paper assets, then that's good for the U.S. The best outcome is the U.S. never exports those goods".
Your nom du keyboard implies a confidence that might be as baseless as your assertion. Hundreds of millions of Americans work to pay the interest payments on the Treasuries that are investments vehicles for our creditors. These worthless pieces of paper enable the purchase of commodities and businesses all over the world by trade surplus nations -- paid for from U.S. bank accounts held by U.S. creditors.
Gettingrational, the U.S. dollar becomes worth less through inflation, low interest rates, and currency exchange rates. So, Americans can work with less effort for more goods, and don't have to work providing goods for foreigners.
Hundreds of millions of Americans work to pay the interest payments on the Treasuries that are investments vehicles for our creditors.
That's true, of course, but really has no place in a discussion of trade deficits. Now, if you want to discuss the federal government's reckless spending that caused the issue of all those bonds, then, by all means, let's do it.
The U.S. still leads the world in manufacturing output, but we also have 20% of American men between the ages of 25 and 54 unemployed. More American manufacturing jobs would ameliorate that. Ideally, we'd probably be better off if manufacturing employees comprised closer to 20% of the workforce than 10%.
"we also have 20% of American men between the ages of 25 and 54 unemployed. More American manufacturing jobs would ameliorate that. Ideally, we'd probably be better off if manufacturing employees comprised closer to 20% of the workforce than 10%.
OR...bear with me now, this is a tough concept....or we can allow markets to work in such a way as to not render the greater population of consumers worse off to support a narrow demographic(i.e. by trying to "force" the economy to support more manufacturing jobs than is warranted for the benefit of a percentage of males ages 25-54). Perhaps...and, again, bear with me....perhaps it would be better for those males to learn skills that people actually value and are willing to pay for. I think it's just crazy enough to work.
"Perhaps...and, again, bear with me....perhaps it would be better for those males to learn skills that people actually value and are willing to pay for"...
Hey XO, maybe Uncle Sam can line up some of those guys with those so called green jobs, eh?
Lets face it the same thing is happening to manufacturing that happend to ag about 80-100 years ago the number of people needed to product the goods we need is declining. I suspect one could have written a similar article about the collapse of Ag employment at the time of the dust bowl. (Which did collapse Ag employment on the great plains).
I suspect that if you did not have offshoring of say clothing manufacturing by now you would have clothes sewn by robots with no human interaction involved.
(Clothing being currently the lowest tech of the consumer industries). Note that some manufacturing is fleeing China for Vietnam, Cambodia and Pakistan because Chinese wages are getting to high, this happend to Japan a generation ago. So Africa will be next once Asia is exhausted of low wage countries. At the same time efforts to robotize goods making will continue, and will deployed when the product is cheaper built by robots than human beings. We may have to adopt a modern version of the solution for the Roman mob, i.e. Big Macs and Video Games (modern version of Bread and Circuses), for the unemployed of the western world.
"Note that some manufacturing is fleeing China for Vietnam, Cambodia and Pakistan because Chinese wages are getting to high, this happend to Japan a generation ago"...
Good point Lyle, its something I've noted also...
The samething happened to the Mexican maquilla factories along the Mexican-American border especially along the Texas border...
Speaking of China I wonder what the Iranian government paid for these specialty trucks and how they compare price wise to similer vehicles from other countries?
Unnaturally high wages in the manufacturing sector due to the artificial labor shortages caused by unions (labor monopolies) have induced many American workers into dead end manufacturing jobs when they could have been going to college and learning to do something useful in today's economy.
"OR...bear with me now, this is a tough concept....or we can allow markets to work in such a way as to not render the greater population of consumers worse off to support a narrow demographic."
Are you as ignorant as you are condescending? Because if not, you might have noticed that the status quo hasn't worked out too well for the greater population either.
"Perhaps...and, again, bear with me....perhaps it would be better for those males to learn skills that people actually value and are willing to pay for. I think it's just crazy enough to work."
Sounds great in theory, but it doesn't work in practice.
Perhaps it's time to set aside your condescension and consider being a little less dogmatic in your libertarianism?
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