Sunday, March 08, 2009

What country is the largest manufacturer?

This often comes as a surprise to people but would you believe that by the best measure available - value added manufacturing output - the United States still accounts for 36% of the global value of manufactured goods. China is closing the gap but still represents just 25% of global value added goods.

How can that be you ask? The US doesn't seem to make anything anymore. Well, it's important to note that many of the products you see or use every day are not made in the US but many high dollar value items are still manufactured here. Consider aircraft, defense systems, pharmaceuticals, heavy capital equipment, and precision scientific equipment.

So, knowing Grindstone Financial like you do, there must be a catch and yes, wise readers, here's the bad news --- while the US is still the global leader in value added manufacturing, manufacturing as a whole has shrunk to just 18% of global GDP. Services now account for 67% of global GDP. Unfortunately, the great regression is going to take the wind out of the services sector for the foreseeable future.

But at least you have a cool bit of trivia that you can use to impress your friends at the water cooler today.

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