U.S. Manufacturing Sector Reaches Annual Sales of Over $4 Trillion
The U.S. manufacturing sector consists of about 300,000 companies with combined annual sales of more than $4 trillion. Major companies include Boeing, Caterpillar, DuPont, Ford, GE, GM, Hewlett-Packard, IBM, Procter & Gamble, Pfizer and Tyson Foods. The manufacturing sector is fragmented: the largest 50 companies account for less than half of overall sales.
Demand ultimately depends on consumer spending. The profitability of individual companies depends on efficient production and distribution. Large companies often have large economies of scale in purchasing, production and marketing. Small companies can compete effectively by producing specialized products. The industry is capital-intensive and highly automated: annual revenue per employee varies greatly due to the large variety of production operations but averages more than $350,000.
Computer systems and controls have steadily increased the labor productivity of US manufacturers, a 50% improvement in the last 10 years. Even so, U.S. labor costs remain high and many labor-intensive manufacturers have moved production operations to lower-cost countries like China.
Major manufactured products include transportation equipment, computers and electronics, food, chemicals, machinery, and products made of metal, plastic, and paper. Cars and planes account for about 16% of U.S. manufacturing output, food and beverages for 15%, chemicals for 15%, and computers and electronics for 9%. For more information, click here.