In 1776, 13 British colonies declared their independence and formed the United States. Over the next 150 years as the country expanded westward, the growing country added 37 additional states. The last two states added were Alaska and Hawaii in 1959. In addition, the United States has several permanently inhabited territories, including Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Northern Mariana Islands and 11 uninhabited or sparsely inhabited territories, which are mostly small islands.
The U.S, not including its overseas territories, has about 9.8 million sq. km of area, 9.1 million sq. km of which is land. For comparison, this makes the country about half the size of Russia or South America, and more than twice the size of the European Union. It is bordered by Canada to the north and Mexico to the south. The Atlantic and Pacific oceans form the east and west borders, respectively. The climate is mostly temperate, but Alaska is arctic, Florida and Hawaii are tropical, and the Great Plains are mostly arid or semi-arid.
Manufacturing in the U.S.
The U.S. is known as a world leader in many industries. Products include petroleum, steel, high-tech, motor vehicles, aerospace, telecommunications equipment, electronics, chemicals, consumer goods, food, lumber and mining products.
Industrial production grew at about 2.3 percent annually as of 2017, but that increased to about 4 percent in 2018. Manufacturing averaged about $1.98 trillion from 2005 to 2018 but reached an all-time high of about $2.13 trillion in 2018.
Other Important Industries
Banking, insurance, business and technical services are important sectors of the U.S. economy, accounting for about 80 percent of the workforce.
Agriculture in the U.S. produces wheat, corn, various other grains, fruits, vegetables, cotton, beef, pork, poultry, dairy products, fish and forest products. Agriculture makes up 0.9 percent of the GDP and occupies 0.7 percent of the labor force. Agricultural products, including soybeans, fruit and corn make up slightly more than 9 percent of the country’s exports.
Supply Chain Infrastructure for Manufacturing
As a leader in the telecommunications industry, you would rightly expect strong communications infrastructure in the U.S. The country has a large fiber-optic system and domestic satellites carry much of the telephones traffic. The U.S. is also number one in the world for the number of airports, heliports, railway miles and roadways, making it easy to move goods across the country or around the world.
The U.S has 5,054 airports, most of which have paved runways long enough to handle large jets and cargo planes. Annual freight traffic equaled about 37.22 billion mt-km in 2015.
Cargo transportation in the U.S. is robust, with 293,564 km of railway lines and more than four million km of paved roadways, so it is relatively simple to move goods. In addition, the U.S. has nine container ports, 11 cargo ports and 11 liquefied natural gas (LNG) terminals. It also has the world’s fifth largest merchant marine presence. This robust infrastructure enables the U.S. to easily import and export goods anywhere in the world, and its open borders between states make it simple to ship goods across the country.
The U.S labor force reached 160.4 million in 2017, making it the third largest workforce in the world. The unemployment rate was 4.4 percent in 2017. About 17 percent of the workforce is involved directly in manufacturing. Services comprise 37 percent, of which 24 percent were in sales and other office-based professions.
Many people in the U.S. workforce are well educated and highly skilled, but the emphasis on technology has led to a chasm in the workforce that can be difficult to cross. These jobs require educated, skilled employees who command high wages, while the wages and opportunities for unskilled workers have stagnated or fallen. Offshore outsourcing exacerbates this skills gap by reducing available work that requires less skilled workers.
While the U.S. was the number one economy in the world in terms of GDP for many years, the economy of China overtook the U.S. in 2014. Though, the U.S. is still a technology powerhouse in computers, pharmaceuticals, medical, aerospace and military equipment. The government is stable and business laws are consistent.
In 2017, the U.S. exported about $1.55 trillion worth of goods. Primary trading partners included Canada, Mexico, China and Japan. The U.S. is the second largest exporter of goods in the world, with primary exports including agricultural products, organic chemicals, industrial supplies, capital goods, transistors, motor vehicle parts, aircraft, computers, telecommunications equipment, consumer goods, automobiles and medicine.
As the number one importer of foreign goods in the world, the U.S. imported around $2.36 trillion in 2017. Primary import partners were China, Mexico, Canada, Japan and Germany. The primary commodities imported included agricultural products, crude oil, industrial supplies, capital goods, computers, telecommunications equipment, motor vehicle parts, office machines, electric power machinery, consumer goods, automobiles, clothing, medicines, furniture and toys.
The U.S. is comprised of 50 states and one district (Washington D.C.). The legal system is based on English Common law at the federal and most state levels. The only state exception is Louisiana, whose legal system is based on the Napoleonic civil code.
Donald Trump has been the U.S. president since 2017. The next presidential election is in November 2020.
The U.S. has intensified efforts to manage and control immigration. In addition, security against terrorism is a high priority as the U.S. remains a primary target for terrorist organizations.
The U.S. made recent changes to reduce its tax rates. The new corporate tax rate is 21 percent, which is down from 37 percent.
It is extremely easy to start a business in the U.S. In fact, the World Bank ranks it as number eight in the world for 2019. Construction permits, obtaining power and telecommunications are fairly quick and easy. U.S. laws offer strong protections to investors and for intellectual property.
Getting Down to Business
Doing business in the United States can be highly advantageous for any manufacturing organization. Abundant resources, an educated workforce and strong legal protections are important, but the robust supply chain infrastructure ensures that companies can readily access materials as needed and deliver to their customers on time. QAD Internationalization can help any manufacturing organization to improve efficiency while QAD Automation Solutions streamlines processes and reporting.
How would you describe the state of Manufacturing in the U.S.? Learn more about manufacturing and doing business in other great countries around the world.