Imports Continue to Eat Away at U.S. Manufacturing

The United States Business & Industry Council released a report in December on import penetration of U.S.-based manufacturing, and the results show that dozens of major domestic manufacturing industries continue to lose large portions of their home market to foreign-produced goods.

The survey included 114 industries, a large cross-section of domestic U.S. manufacturing, and was based on just-released manufacturing data from the U.S. Census Bureau and on the Census Bureau's export and import data. The report covered import penetration through 2005.

The bottom line is that dozens of domestic industries, including many high-tech and capital-intensive sectors, have seen the same losses in their home market that have driven Ford Motor Co. and General Motors Corp. close to bankruptcy.

The research also shows that domestic manufacturing's marketshare losses mounted during both strong and weak-dollar periods, as well as during expansions and recessions.

Key findings include:

  • Between 1997 and 2005, 111 of the 114 industries analyzed lost shares of their home U.S. market — the market they should know best.
  • Of the 114 industries, 83 lost further share of the U.S. market from 2004-2005.
  • Between 1997 and 2005, import penetration rates doubled or more in 26 industries.
  • In 2005, 24 industries had lost 50 percent or more of the U.S. market to imports, up from 21 in 2004
  • Two of the biggest losers in 2004-5 in percentage terms were aircraft engines and aircraft engine parts, and non-engine aircraft parts.

A full summary of the report is available at the USBIC Internet site (www.americaneconomicalert.org).

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