Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98580
Authors: 
Houseman, Susan N.
Bartik, Timothy J.
Sturgeon, Timothy J.
Year of Publication: 
2014
Series/Report no.: 
Upjohn Institute Working Paper 14-209
Abstract: 
Growth in U.S. manufacturing's real value-added has exceeded that of aggregate GDP, except during recessions, leading many to conclude that the sector is healthy and that the 30 percent decline in manufacturing employment since 2000 is largely the consequence of automation. The robust growth in real manufacturing GDP, however, is driven by one industry segment: computers and electronic products. In most of manufacturing, real GDP growth has been weak or negative and productivity growth modest. The extraordinary real GDP growth in computer-related industries reflects prices for computers and semiconductors that, when adjusted for product quality improvements, are falling rapidly. Productivity growth in these industries, in turn, largely reflects product and process improvements from research and development, not automation. Although computer-related industries have driven growth in the manufacturing sector, production has shifted to Asia, and the U.S. trade deficit in these products has soared since the 1990s. The outsized effect computer-related industries have on manufacturing statistics also may distort economic relationships in the data and result in perverse research findings. Statistical agencies should take steps to assure that the influence that computer-related industries have on manufacturing-sector statistics is transparent to data users.
Subjects: 
Manufacturing
computers
semiconductors
productivity
globalization
global value chains
JEL: 
L60
F60
Document Type: 
Working Paper

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