Manufacturing Sector

Manufacturing Sector

Brief Excerpt from Industry Overview Chapter:

Companies in this industry manufacture a wide variety of goods; major product groups include food and beverages, chemicals, transportation equipment, and computers and electronics. Major companies include Boeing, Caterpillar, DuPont, Ford, GE, GM, Hewlett-Packard, IBM, Procter & Gamble, Pfizer, and Tyson Foods (all based in the US); Nestlé (Switzerland), Sanofi (France), Siemens (Germany), and Toyota Motor (Japan).

The global manufacturing industry generates more than $10 trillion in annual revenue. Top manufacturing countries include the US, Japan, China, Germany, Italy, and the UK. Leading exporting countries include China, the US, Germany, Japan, and France.

The US manufacturing sector consists of about 290,000 establishments (single-location companies and units of multi-location companies) with combined annual sales of about $5 trillion, and is forecast to grow at a moderate rate in the next two years. Leading growth drivers include rapid industrialization in the developing world, along with the use of technology to improve products and supply chains.

COMPETITIVE LANDSCAPE

Demand ultimately depends on consumer spending. The profitability of individual companies depends on efficient production and distribution. Large companies often have large economies of scale in purchasing, production, and marketing. Small companies can compete effectively by producing specialized products. The manufacturing sector is fragmented: the largest 50 companies account for less than half of overall sales.

Computer systems and controls have steadily increased the labor productivity of US manufacturers in the last 10 years. Even so, US labor costs remain high, and many manufacturers have...