Manufacturing Is Vital for Economic Security
Economic security is a powerful concept that affects everyone. It’s the ability of a country to maintain a healthy economic cycle and, as a result, for individuals participating within that economy to cover essential needs such as food, clothing, and housing. Problems at the highest levels will trickle down into everyday life, often manifesting in depression or recession.
Now, in 2022, with threats of economic downturn looming, manufacturers are raising the alarm about economic security. Manufacturing is often first- and hardest-hit in times of economic contraction, which threatens economic security at a macro level. Producers are the canary in the coal mine, and their concerns can quickly become very real problems for the greater economy.
Shedding a light on manufacturing’s importance
Manufacturing is a bellwether for the economy. It’s vital not just to economic security, but also national security. As lawmakers and manufacturers look at today’s economic landscape, there are rallying cries to help support the industry as the country faces recessionary concerns.
David Boulay, President of Illinois’ Manufacturing Excellence Center, recently highlighted the importance of manufacturing as a means to economic security. “The industry itself is a powerhouse. And again, when we think of all of the parts of what manufacturing brings to our communities, that has that multiplier effect in so many ways to help keep a strong and vibrant economy.”
In seeking to create stability, Boulay says there are several ways to ensure manufacturing stays robust and continues to grow — among them, making investments in talent and production technology, as well as localizing supply chains. The recent passage of the CHIPS Act is just one step in the right direction, but it’s just a start.
In short, uplifting the manufacturing industry should be a focus of both economic and national security. The time to act on both of these concerns is now, before downturn gains momentum.
Manufacturing’s impact, by the numbers
Just how important is manufacturing to the overall economic picture in the U.S.? In 2018, the sector accounted for just over 11% of total economic output, or $2.3 billion. It’s also a significant source of employment, with 8.51% of the nation’s workforce involved in some form of domestic production.
Boosting domestic production — or maintaining it, at the very least — is critical for a thriving economy. By maintaining a favorable import-export balance, the country can increase its GDP, affecting everything from the dollar’s exchange rate to level of inflation and interest rates. In this way, domestic production affects everyone in the country and the global economy.
A closer look at critical industry
While the manufacturing sector is a critical component for the U.S. economy, there are certain subsectors of domestic production that are vital for security. These areas of production include primary metals, machinery, electrical equipment, appliances and components, and transportation equipment. They’re part of the “Critical Manufacturing Sector,” deemed crucial to the economic prosperity and continuity of the country.
Products made by industries in the Critical Manufacturing Sector support many other essential infrastructure sectors, and one disruption can create a domino effect. By identifying, prioritizing, and protecting these industries, manufacturing leaders and lawmakers alike can support the economic well-being of the entire country. The time to consider action is now, for the benefit of everyone.