Manufacturing as a percentage of GDP could reach pre-recession levels of more than 15 percent by 2025 given the right conditions, according to Thomas Duesterberg, executive director of The Aspen Institute for Manufacturing and Society in the 21st Century. That’s about 4 percentage points higher than its current level.
Duesterberg, joined by panelists from the Manufacturer’s Alliance for Productivity and Innovation and the National Association of Manufacturers, spoke in Washington, DC, this week to discuss the Aspen Institute study, “What Could a Manufacturing Resurgence Mean to the U.S. Economy by 2025?”
Duesterberg said more than half of the manufacturing gains forecast by the study’s optimistic scenario would come from stronger export growth and slower import growth. Rapidly rising energy and logistics costs in competitor countries and the anticipated slight weakening of the U.S. dollar will contribute, he says, but improving manufacturing production’s share of GDP will hinge on the more aggressive pursuit of international trade agreements.
“This scenario can be, we think, facilitated and possibly accelerated with certain policy decisions,” Duesterberg said, pointing to the U.S.-E.U. Transatlantic Trade and Investment Partnership currently in negotiations. That agreement isn’t proof that the U.S. government has overcome historical obstacles, but he said it’s a sign that people are taking a second look at the importance of manufacturing to an economic recovery in the U.S.
Jay Timmons, president and CEO of NAM, said while he commends the President for his efforts in pushing forward agreements with the European Union, Panama and South Korea, it’s not enough to help manufacturers reach the 90 percent of consumers that live outside the U.S. “If I would say that the administration should improve in one area, I think that they need to be more aggressive for other opportunities,” he said.
Duesterburg said when it comes to pushing trade agreements, increasing awareness of manufacturing’s economic importance is the first step, and the next is translating that into good policy. “We just need to keep that ball rolling,” he said.