[obrienmd]

This is a common misconception - manufacturing output, beyond drops during major recessions, has steadily increased[1]. Recently, increases have slowed but outside recessions, "the general decline of US manufacturing capacity" is just not happening.

What is dropping are inputs for the same output - employment being the most obvious / painful, but power, raw materials, etc. are all being used more sparingly as manufacturers improve processes and adopt new technologies.

1. https://fred.stlouisfed.org/series/OUTMS

[Spooky23]

Actually, it's not. Those manufacturing output numbers are both tricky and misleading. They are dominated by computer/electronic production and automotive. Because of how the statistics account for imports and technology advancement, the electronic components in particular are frequently overstated. For example, when Intel was shipping chips that were 2x more powerful than the last generation, that effectively doubled the measured output.

Simultaneously, the stats under account for services and non-market production. So things like Medicare/Medicaid ($1T annually) are measured at their cost, not based in the value delivered.

The reality is that industrial production in the US is 15-20% less than it was 20 years ago. Automation kills employment but most of the value creation has been exported to Asia. Denying that is denying reality.

Some articles: http://www.economist.com/news/briefing/21697845-gross-domest...

http://www.realclearpolicy.com/blog/2015/05/27/the_hidden_de...

https://www.bloomberg.com/news/articles/2009-06-03/growth-wh...

[snowwrestler]

Can you please supply a direct quote from one of those articles to support this assertion?

> The reality is that industrial production in the US is 15-20% less than it was 20 years ago.

I wonder how recently and carefully you have read these articles. For example, the Economist and Real Clear Policy pieces are directly contradictory on the subject of measuring value vs. price for electronics.

The Bloomberg piece is 8 years old. And even then, it says:

> After the adjustments, however, the new growth rate for manufacturing output might be as small as 0.8% a year,

Growth of 0.8% a year, while anemic, is not a decline.

[spangry]

I certainly wouldn't count America out. However, looking at the numbers in terms of growth, there's been a pretty steady downward trend since (an unusually high) 2010 Q3: https://fred.stlouisfed.org/graph/?g=dmxz

Although the very last recorded quarter could be the start of a trend reversal... Regardless, you're correct on your original point: a reduction in energy usage would not be due to an output decline in manufacturing (which is the most energy intensive sector in most modern economies).

[tyingq]

>a reduction in energy usage would not be due to an output decline in manufacturing

I'd like to understand this. How is there zero correlation between energy use and manufacturing output?

[spangry]

That's not what I meant to say. Sorry, reading back on what I wrote I can see my wording was a bit ambiguous. They are definitely positively correlated.

The chart shows that from about 2010 onward, manufacturing output has been growing, but at a steadily declining (but still positive) rate. So manufacturing output was still growing until it hit zero growth in 2014 and started crawling along the floor, roughly at a steady-state.

So between 2010 and 2014, manufacturing should have been consuming more electricity (in absolute terms) from one year to the next. I suppose if manufacturing became less energy intensive per unit of output over that period then they could have contributed to reduced energy usage. Since I'm just some random internet dude reading a chart (who doesn't live in the US) I have no idea if that's the case.

Um, you wouldn't happen to know by any chance? :)

[tyingq]

Heh, no.

I'm still skeptical. Basically wondering if "Manufacturing Sector: Real Output" is somehow "dollar driven" vs "actual number of electric consuming plants" driven.

Of course, I can't find any good statistics on that. Something like this: http://www.politifact.com/punditfact/statements/2015/apr/23/... but with more detail. Because that could just be consolidation into smaller numbers of larger plants.

[Spooky23]

Government has been targeting industrial users heavily for the last decade. If you have spinning machines or industrial scale use, you will attract investment to reduce load, and very substantial investment if you allow the utility to shed your load (i.e. Turn stuff off) turning peak periods.

[tyingq]

Your chart shows current numbers roughly equal to 2008. That doesn't feel like growth.

[kelnos]

Mainly because we're in a recovery period from the recession that started in 2008. The trend is clearly still upward, though it's starting to level off. Too soon to tell if that's temporary or not.

[coliveira]

The main reason why the manufacturing sector in the US is still large is for the increasing expenditures in defense. The military/industrial complex receives huge cash infusions every year - corresponding to a large percentage of the federal budget. It is hard to predict what could happen to manufacturing in this country without such defense expenses.