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Manufacturing Fuels the US Economy
Manufacturing has direct links to—and effects on—other sectors of the economy. These relationships can be both “backwards” (such as with mining or construction), or “forwards” (such as with warehousing, transportation, and the wholesale and retail trade of the finished products). Growth in manufacturing therefore fuels other sectors, creating jobs and investment in non-manufacturing sectors. Manufacturing has the highest multiplier of all sectors. (The wholesale and finance sectors have the lowest multipliers.)
The positive effects of a healthy industrial sector spread far beyond manufacturing itself. Reports from the National Association of Manufacturing (NAM) indicate that each dollar’s worth of manufactured goods creates another $1.43 of activity in other sectors, twice the $.71 multiplier for services. Also, two thirds of U.S. research and development capacity is concentrated in manufacturing. Manufacturing has long been a dynamic economic sector, registering remarkably sustained productivity growth.