Manufacturing and the US Economy

Ever since the onset of the industrial revolution, manufacturing capacity and output in the US has been nurtured due to its critical importance both in terms of producing what US consumers demand, but also in terms of the key components and products needed to maintain national security. Underpinning that growth has been the relatively easy access to the vast natural resources reserves in the US including abundant fossil fuels to power manufacturing facilities.

While the overall percentage of the workforce employed in manufacturing has fallen considerably in the past fifty years, the industrial sector still accounts for approximately 11% of US GDP and hovers around 9% of the workforce (NAM: 2022 US Manufacturing Facts). Despite this smaller economic footprint in the US, the industrial sector emits 23% of total US GHG emissions (EPA) and accounts for 33% of total U.S. energy consumption (EIA). Thus, when looking at the energy transition in the US, as with the transportation sector, improving manufacturing processes and materials use is imperative (EIA: Use of Energy Explained).

Industrial processes use energy in a variety of ways including those similar to commercial and residential facilities: heating and cooling, lighting and office-related needs. But manufacturing also requires energy to turn motors and power industrial equipment, generate steam for process heating and even use fossil fuel derivatives for feedstocks (e.g., chemicals, plastics). Natural gas and petroleum account for the majority of energy use with renewables seeing a slight increase in the past 20 years. One area where manufacturing has made significant gains is in energy efficiency. In fact, data from the most recent Manufacturing Energy Consumption Survey from the US EIA (2018) revealed that “from 1998 to 2018, manufacturing energy intensity decreased by 26%. During this same period, manufacturing gross output increased by 12%, indicating continued energy efficiency gains.”

Not surprisingly, accompanying the efficiency gains have been a general trend of declining GHG emissions from US manufacturers in terms of both direct emissions (produced at the facility) and indirect emissions (produced offsite but associated with the facility’s use of electricity). The EPA reports that “total U.S. greenhouse gas emissions from industry, including electricity, have declined by 14% since 1990.” Even with all the positive momentum in this sector toward greater energy efficiency and a lower carbon footprint, there is still ample opportunity for improvement due to the variety of ways the industrial sector consumes energy and the vast amount of resources required as feedstock and inputs to production.