The Economic Benefits of a Continued U.S. Manufacturing Renaissance
Investments and Growth in the Manufacturing Sector Will Add 6.1 Million New Jobs by 2020
The manufacturing sector is experiencing a significant rebirth. From 2012 to 2015, domestic and foreign manufacturing firms poured $1.1 trillion of capital expenditures into the U.S. economy, a 40% increase from the previous four-year period of 2008 to 2011. A key driver in this rebirth has been the shale oil and natural gas revolution, which has released low-cost oil, natural gas, and natural gas liquids for U.S. manufacturers to use in producing valuable products for North American and international markets.
Planned and committed investments will continue to drive the U.S. manufacturing renaissance through 2020. This rebirth will not only center on chemical manufacturing industries, but also on such sectors as food products, computers and electronics, petroleum and coal products, and metal products.
FTI applied a dynamic macroeconomic model (the REMI PI+ model) to assess the impacts of continued manufacturing investments. These investments include new capital expenditures on construction of structures, equipment and materials, and supply chain industries as well as the economic impact of new facilities once they begin operations – with both their direct employment and supply chain – later in this decade and the 2020s.
Our analysis found the continued manufacturing renaissance would have the following economic impacts:
- 6.1 million new jobs by 2020
- $775 billion in incremental GDP by 2020
- An almost 4 percent increase in forecasted GDP
- $1,000 per capita increase in personal income by 2020