US manufacturing sector’s woes pose wider dangers

Jan 18, 2016

If currencies at least partly determine where things get made, the continued rise in the US dollar is bad news for manufacturers in the US. It is especially bad news given that rise is particularly sharp against the Chinese renminbi since the mainland has become the workshop of the world after 2001 when China joined the World Trade Organisation.

Manufacturing accounts for less than 12 per cent of GDP and 8.6 per cent of employment in the US. But those two data points do not capture the true importance of manufacturing to the US economy. In addition, Manufacturing has an impact on the services sector, which is where the bulk of jobs in the US are concentrated.

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