Manufacturing is the process of transforming materials or components into finished products that can be sold in the marketplace. Every physical product that you buy in a store or online is manufactured somewhere. The manufacturing industry is one of the largest sectors of the U.S. economy, employing more than 12 million workers. Today, technology is causing the country’s economy to move towards offering services as opposed to producing goods. However, it is becoming clear to economists that a healthy manufacturing industry is one of the hallmark indicators of a healthy, thriving economy. And manufacturing intermingles with nearly every area of the economy.
Manufacturing Industries Definition
Manufacturing industries are those that engage in the transformation of goods, materials or substances into new products. The transformational process can be physical, chemical or mechanical. Manufacturers often have plants, mills or factories that produce goods for public consumption. Machines and equipment are typically used in the process of manufacturing. Although, in some cases, goods can be manufactured by hand. An example of this would be baked goods, handcrafted jewelry, other handicrafts and art.
There are several massive manufacturing industries in the United States including food, beverage, tobacco, textiles, apparel, leather, paper, oil and coal, plastics and rubbers, metal, machinery, computers and electronics, transportation, furniture and others. More than 12 million Americans are employed across manufacturing industries. Further, many millions more are employed indirectly by the manufacturing industries. Manufacturing is vital to the U.S. economy, making up a large percentage of the country’s gross domestic product (GDP). Manufacturing industries are responsible for the goods in our economy, or the physical products we buy and use every day.
What Manufacturing Industries Do
Manufacturers create physical goods. How these goods are created varies depending on the specific company and industry. However, most manufacturers use machinery and industrial equipment to produce goods for public consumption. The manufacturing process creates value, meaning companies can charge a premium for what they create. For example, rubber is not particularly valuable on its own. But when it is formed into a car tire, it holds substantially more value. So, in this case, the manufacturing process that allows the rubber to be transformed into a necessary car part adds value.
Prior to the Industrial Revolution, the majority of goods were made by hand. Since the Industrial Revolution, manufacturing has grown increasingly important, with many goods being massed produced. Mass production means that goods can be produced much more quickly and with more precision. This drives down prices and makes many consumer goods cheaper, their cost within reach of the general public. When the assembly line was introduced into manufacturing, production further skyrocketed. Then, in the early 20th century, Henry Ford introduced a conveyor belt that physically moved products through the factory, from one station to the next. Each station also had a worker responsible for fulfilling a specific stage in the production process. This simple conveyor belt tripled production, and changed manufacturing forever.
Today’s advancement of computer technology allows manufacturers to do more with less time. Now, thousands of items can be manufactured within the space of minutes. Computer technology can be used to assemble, test and track production. Each year, technology continues to make manufacturing increasingly efficient, faster and more cost-effective. However, automation also eliminates many manufacturing jobs, leaving skilled employees without work.
Manufacturing Industries Examples
There are many manufacturing industries in the United States. The following are some of the most popular manufacturing sectors in the country:
- Food manufacturing: The food sector of manufacturing transforms agricultural or livestock products into products for consumption. Typically, these are sold to wholesalers or retailers who then sell those products to consumers. A few examples of food manufacturing products are baked goods, grains, fruit and vegetable preserves and animal meat. * Beverage and tobacco product manufacturing: Interestingly, tobacco and beverages are in the same sector of manufacturing. Beverage products include those that are non-alcoholic, as well as those that are alcoholic through the fermentation or distillation process. Ice is also considered a manufactured beverage. Tobacco products are loose tobacco products, as well as those that are in cigarette or cigar form. * Textile manufacturing: Textile manufacturers turn fibers into usable fabrics that will eventually be transformed into consumer goods such as apparel, sheets, towels or curtains. A few examples of textile manufacturing are fiber, yarn, thread and fabric mills. * Apparel manufacturing: Apparel manufacturers fall into two main types. The first is cut and sew, meaning a garment is created by purchasing fabric, cutting it up and then sewing it. The second type of apparel manufacturing involves knitting the fabric and then cutting and sewing it. The apparel sector is extremely popular and encompasses many different kinds of workers, including tailors and even knitters. * Leather and allied product manufacturing: This sector is concerned with the manufacturing of leather as well as leather substitutes such as rubbers or plastics. The reason leather substitutes fall under this sector of manufacturing is that they are often made in the same factories with the same machinery as leather products. It doesn’t make sense for manufacturers to separate them, so they are both included. * Wood product manufacturing: Wood manufacturing covers products like lumber, plywood, veneers, flooring and more. Further, manufactured homes and prefabricated wood buildings are considered wood product manufacturing. Wood must be cut, shaped and finished. Some manufacturers use logs to make their wood products while others purchase pre-cut lumber and further process the wood from there. * Paper manufacturing: Paper manufacturers make pulp, paper or convert paper products. These three processes are grouped because many manufacturers do all three. It would be cumbersome to separate these activities from one another, so it makes sense to group them. * Petroleum and coal manufacturing: This industry is concerned with transforming crude petroleum and coal into usable consumer products. Petroleum requires refining before consumers can use it. The refining process separates different components of the petroleum for different products. * Chemical manufacturing: Chemicals manufacturing encompasses several different industries. This manufacturing process is the transformation of organic or inorganic materials into a unique product. A few examples of this are pesticides, fertilizers, pharmaceuticals, soaps, cleaning compounds and more. * Plastics and rubbers manufacturing: This manufacturing sector makes rubbers and plastics. The two are lumped together because they are used as substitutes for one another. However, each is its own subsector, meaning plants can usually only manufacture one of the two; not both. * Metal manufacturing: The metal manufacturing sector produces metals like iron, steel, aluminum and more. It also includes foundries. * Fabricated metals: Under this sector, metals are transformed into other end products. Some examples of products are cutlery, hand tools, hardware, springs, screws, nuts and bolts. * Machinery manufacturing: This sector of manufacturing creates machines that apply mechanical force. The machines are created through processes like forging, stamping, bending, forming, welding and the assembling of parts. Machinery manufacturing is complex and covers many processes. Machines are complicated and require many parts, not to mention specific mechanics. For example, a piece of industrial machinery could have a computer, as well as many other components. Machine manufacturing encompasses agricultural, construction, mining, heating, cooling, ventilation, air conditioning, refrigeration, engines and more. * Computer and electronics manufacturing: This sector of manufacturing is rapidly growing and continues to grow. The insatiable demand for electronics makes this a highly competitive industry. Because of the use of integrated circuits and miniaturized technology, this is a specialized manufacturing sector. This grouping includes computers, communications equipment and audio and visual equipment, to name a few. * Transportation equipment manufacturing: Nearly everything to do with the transporting of goods and people is produced in this manufacturing sector. This is a massive sector of the manufacturing industry, encompassing motor vehicles, planes, trains and ships. Transportation equipment, in general, qualifies as machinery. These manufacturing processes are extremely complex and require many different components being made in the same factories. * Furniture manufacturing: This sector of the manufacturing industry includes furniture and all other related products such as mattresses, blinds, cabinets and lighting. Goods that are manufactured in this sector must be functional and have a well-thought-out design. There are countless processes that can go into manufacturing furniture. One such example is the cutting, shaping, finishing and attaching of wood to make a table.
Why Manufacturing Industries Matter
Manufacturing industries matter for several reasons. Historically, the United States has been one of the world’s largest – if not the largest – manufacturer of goods. The manufacturing and exporting of goods help keep money flowing into the U.S. economy. Economies thrive when they have strong manufacturing industries. Further, when manufacturing is thriving, innovation soars. Manufacturers produce roughly 75 percent of all privately funded research and development in the country. Manufacturing is a huge propeller of innovation and forward thinking. Today, the U.S. remains highly competitive in several manufacturing industries, chief among them automobiles, aerospace and chemicals.
Another reason manufacturing industries matter is because factory jobs tend to be middle-class jobs that pay above-average wages. Manufacturing is one of the few industries where a worker without an advanced degree can earn a living wage. Because it is one of the country’s largest employment sectors, a lot of families rely on manufacturing industries to put food on the table. The industrial sector also supports many secondary industries. Manufacturing supports roughly 1-in-6 service jobs. Even manufacturing companies need lawyers, accountants, doctors, financial advisors and other service professionals.
Manufacturing industries also spur investments and encourage the building of infrastructure. There are few areas of the economy that manufacturing industries don’t touch. Many other industries contribute directly and indirectly to manufacturing. A few examples are construction, engineering, printing and transportation, which are all needed to help keep manufacturing afloat. A new factory can’t be built without an engineer, an architect and a construction crew. Clothing manufacturers can’t get their products to stores without shipping their products. New products can’t be developed without research and development teams, engineers and product designers. Countless companies would cease to exist without manufacturing, as they would have no products to sell. Ultimately, manufacturing industries are deeply entangled in the world economy.
It is unclear whether manufacturing will continue to decline in the U.S., or whether it will begin to thrive again. There does not seem to be a consensus among economists. Some believe that we are moving into a post-goods economy where services will reign supreme. Others believe that manufacturing will continue to grow, though it will evolve with technology. Manufacturing jobs may become highly skilled technical jobs that require advanced training. Companies might hire engineers rather than blue collar workers. It’s difficult to predict what will happen. However, what remains clear is that for now, manufacturing has an important role to play in both the economy and the labor force.
Chelsea Levinson earned her B.S. in Business from Fordham University and her J.D. from Cardozo. She is a small business owner who has created content for Bank of America, H&R Block, CNBC, AOL and many more.