October 2021
October is Manufacturing Month is Ohio
10 Facts You Need to Know About Manufacturing

1. Manufacturers contributed $2.52 trillion to the U.S. economy in the second quarter. 
Manufacturing value-added output increased from $2.444 trillion in the first quarter to $2.525 trillion in the second quarter, an all-time high. Overall, manufacturing accounted for 11.1% of GDP in the economy. Real value-added output in the manufacturing sector rose from $2.298 trillion at the annualized rate in the first quarter to a record $2.329 trillion in the second quarter, as expressed in chained 2012 dollars. This suggests that the sector has continued to rebound strongly, even with lingering challenges from COVID-19 and supply chain and workforce issues. In the latest data, real value-added output for durable goods increased from $1.272 trillion to a record $1.286 trillion, with nondurable goods activity rising from $1.025 trillion to $1.043 trillion, the highest since the fourth quarter of 2007. (Source: Bureau of Economic Analysis)

2. For every $1.00 spent in manufacturing, another $2.79 is added to the economy. 
For every $1.00 spent in manufacturing, another $2.79 is added to the economy. That is the highest multiplier effect of any economic sector. In addition, for every one worker in manufacturing, there are another five employees hired elsewhere. For every $1 earned in direct labor income in the manufacturing sector, there will be another $3.14 in labor income earned elsewhere, including indirect and induced impacts. (Source: NAM calculations using 2019 IMPLAN data.)
With that said, recent research suggests that manufacturing’s impacts on the economy are even larger than that if we consider the entire manufacturing value chain plus manufacturing for other industries’ supply chains. That approach estimates that manufacturing could account for one-third of GDP and employment. Along those lines, it also estimated the total multiplier effect for manufacturing to be $3.60 for every $1.00 of value-added output, with one manufacturing employee generating another 3.4 workers elsewhere. (Source: Manufacturers Alliance for Productivity and Innovation)

3. The majority of manufacturing firms in the United States are quite small. 
The majority of manufacturing firms in the United States are quite small. In 2018, there were 246,155 firms in the manufacturing sector, with all but 3,960 firms considered to be small (i.e., having fewer than 500 employees). In fact, three-quarters of these firms have fewer than 20 employees. (Source: U.S. Census Bureau, Statistics of U.S. Businesses)

4. There were 12.42 million manufacturing workers in August. 
Manufacturing employment increased by 37,000 in August. Over the first eight months of 2021, total employment in the sector rose by a solid 190,000, with 12,421,000 manufacturing workers in August. There remained 378,000 fewer manufacturing employees relative to pre-pandemic levels, with 12,799,000 workers in the sector in February 2020. Meanwhile, the U.S. economy added just 235,000 workers in August, well below consensus expectations and the weakest since January. The spread of the delta variant likely played into the disappointing reading, with employment lower for retail trade and construction and flat for leisure and hospitality. Nonetheless, the U.S. economy has generated 4,687,000 net new jobs so far this year, a decent pace, even as nonfarm payrolls remain down 5,333,000 today relative to pre-pandemic levels in February 2020.
The unemployment rate dropped from 5.4% in July to 5.2% in August, a post-pandemic low, with the number of unemployed workers decreasing from 8,702,000 to 8,384,000. The labor force participation rate was unchanged at 61.7% for the month, remaining down from 63.3% in February 2020 but up from the low of 60.2% in April 2020. In addition, the so-called “real unemployment rate”—a term that refers to those marginally attached to the workforce, including discouraged workers and the underemployed—dropped from 9.2% to 8.8%, a 17-month low but still highly elevated. (Bureau of Labor Statistics)

5. While labor productivity has been sluggish, manufacturers continue to operate leanly. 
Manufacturing labor productivity has been sluggish since the Great Recession, which has been frustrating, averaging a decline of 0.4% from 2011 to 2020. Nonetheless, output per worker in the manufacturing sector jumped 6.9% at the annual rate in the second quarter, with output rising 3.8%. Unit labor costs fell 1.9% for the quarter. Overall, manufacturers have continued to operate “leanly,” which has helped to make them competitive globally. Output per hour for all workers in the manufacturing sector has increased by more than 2.24 times since 1987. In contrast, productivity is roughly 1.94 times greater for all nonfarm businesses. Note that durable goods manufacturers have seen even greater growth, approaching 2.62 times the output per worker seen 34 years ago. (Source: Bureau of Labor Statistics)

6. By 2030, 4 million manufacturing jobs will likely be needed. 
Over the next decade, 4 million manufacturing jobs will likely be needed, and 2.1 million are expected to go unfilled if we do not inspire more people to pursue modern manufacturing careers. Moreover, according to a recent report, the cost of those missing jobs could potentially total $1 trillion in 2030 alone. (Source: Deloitte and The Manufacturing Institute)

7. Manufacturing in the U.S. would be the eighth-largest economy in the world. 
Taken alone, manufacturing in the United States would be the eighth-largest economy in the world. With $2.27 trillion in value added from manufacturing in 2019, only seven other nations (including the U.S.) would rank higher in terms of their GDP. Those other nations with higher GDP in 2019 were (in order) the U.S., China, Japan, Germany, India, the United Kingdom and France. After manufacturing in the U.S., the next five economies would be Italy, Brazil, Canada, Russia and South Korea, in that order. (Source: Bureau of Economic Analysis, International Monetary Fund)

8. Manufacturers perform nearly 58% of all private-sector R&D. 
Manufacturers in the United States perform 57.9% of all private-sector R&D in the nation, driving more innovation than any other sector. R&D in the manufacturing sector has risen from $132.5 billion in 2000 to $295.7 billion in 2020. In the most recent data, pharmaceuticals accounted for 35.7% of all manufacturing R&D, spending $105.7 billion in 2020. Computer and electronic products (16.0% of manufacturing R&D), semiconductor and other electronic components (13.3%) and motor vehicles and parts (8.0%) also contributed significantly to R&D spending in 2020. (Source: Bureau of Economic Analysis)

9. Manufacturers consume more than 30% of the nation’s energy. 
Manufacturers consume more than 30% of the nation’s energy consumption. Industrial users consumed 32.3 quadrillion Btu of energy in 2018, or 32.3% of the total. (Source: U.S. Energy Information Administration, Annual Energy Outlook 2019)

10. The cost of federal regulations falls on manufacturers. 
The cost of federal regulations falls disproportionately on manufacturers, particularly those that are smaller. Manufacturers pay $19,564 per employee on average to comply with federal regulations, or nearly double the $9,991 per employee costs borne by all firms as a whole. In addition, small manufacturers with fewer than 50 employees spend 2.5 times the amount of large manufacturers. Environmental regulations account for 90% of the difference in compliance costs between manufacturers and the average firm.

Crawford Eye Clinic, Inc., 218 Portland Way North, Galion. (419) 468-3545. Optometrist, Vision Exams, Glasses and Contact Lenses.

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Galion City Schools: A dedication and ribbon-cutting ceremony for the new Soccer Complex on Galion City Schools campus was held during halftime of the Lady Tigers' match against Mansfield Senior on October 5th.
Crawford County Council on Aging: A ribbon-cutting ceremony was held at the Historic Grace Church on October 13th for the Crawford County Council on Aging. Congregate Meals provided by the Council on Aging will now be served at the Historic Grace Church.
United Way of North Central Ohio - Congratulations to United Way of North Central Ohio! They are an October 2021 recipient of the Ohio Treasurer Robert Sprague’s Compass Award.
 The monthly recognition program commends organizations, programs, and individuals across the state who are working to guide Ohioans toward financial literacy and empowerment.

First Federal Bank of Ohio, Galion- Thank you to First Federal Bank of Ohio for serving our community for 130 years!
Do you have an anniversary, new associate or employee, sign, or business update? Contact Miranda or Candy at the Chamber Office, 419-468-7737 or email candy@galion-crestlinechamber.org so we can add your business to the Member Spotlight in our next Newsletter.
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